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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Tuesday, 26 July 22
CAP RUSSIA'S OIL PRICE NOW - PROJECT SYNDICATE
Though the price of oil has declined in recent weeks, it is still through the roof, filtering through to gasoline prices, and causing economic and ...
Tuesday, 26 July 22
WILL SOUTH AMERICA’S WINTER DEMAND DRAW LNG CARGOES AWAY FROM EUROPE? - ICIS
South America is now in the middle of its winter demand season. Last year the region increased its share of global LNG imports in winter, with Braz ...
Monday, 25 July 22
GLOBAL 2021 COAL-FIRED ELECTRICITY GENERATION SURGES TO RECORD HIGH - REUTERS
By contrast, mine output was still fractionally below the record set between 2012 and 2014 because older and less efficient coal generators have be ...
Saturday, 23 July 22
THE EU HAS BEEN REDUCING IMPORTS OF RUSSIAN REFINED OIL PRODUCTS SINCE MARCH - BANCHERO COSTA
The European Union could now ban the import and transit of fuel oil from Russia around six months ahead of the planned deadline, an EU official and ...
Saturday, 23 July 22
INDONESIA CONSIDERING SCRAPPING DOMESTIC SALES RULE FOR PALM OIL EXPORTS - REUTERS
Indonesia is considering removing a domestic sales requirement for palm oil exports because high inventories of the vegetable oil have been holding ...
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- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- LBH Netherlands Bv - Netherlands
- Banpu Public Company Limited - Thailand
- Mercator Lines Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- Baramulti Group, Indonesia
- Australian Coal Association
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- London Commodity Brokers - England
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Romanian Commodities Exchange
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Wood Mackenzie - Singapore
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Ministry of Mines - Canada
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
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