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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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Friday, 21 January 22
CHINA'S POWER TRADING TARIFFS TO RISE IN 2022 - FITCH RATINGS
Rising trading volume and higher-than-benchmark tariffs in the 2022 bilateral contracts signed between Chinese power generation companies (gencos) ...
Thursday, 20 January 22
CHINESE COAL JUMPS OVER 6% ON PRE-HOLIDAY SUPPLY WORRY - REUTERS
China’s thermal coal futures soared more than 6% on Wednesday, hitting a level last seen in late November as investors grew concerned over ti ...
Thursday, 20 January 22
VIETNAM: COAL SECTOR SEES POSITIVE PROSPECT IN 2022 - VNA
With many signs of rising demand for coal in various economic sectors in 2022, the Vietnam National Coal – Mineral Industries Group (Vinacomi ...
Wednesday, 19 January 22
MARKET INSIGHT - INTERMODAL
Since the beginning of the year, we have been witnessing the BDI correcting downwards with sizable drops across all segments. Latest similar levels ...
Sunday, 09 January 22
INDONESIA MINISTER SAYS 'EMERGENCY OVER' ON COAL SUPPLY CRUNCH - REUTERS
Indonesia’s power emergency which has triggered a coal export ban is over but the government will still continue to discuss policies in this ...
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- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- CNBM International Corporation - China
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- OPG Power Generation Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- London Commodity Brokers - England
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- PTC India Limited - India
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Australian Coal Association
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Kapuas Tunggal Persada - Indonesia
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Planning Commission, India
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Ministry of Mines - Canada
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