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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, 14 December 21
COAL LOCK-IN IN SOUTHEAST ASIA PRESENTS A CHALLENGE FOR THE ASIAN DEVELOPMENT BANK'S COAL RETIREMENT PLAN - IEEFA
In August, the Asian Development Bank (ADB) announced an ambitious plan to buy high emissions coal-fired power plants in Southeast Asia and retire ...
Saturday, 11 December 21
BUNKER BUYERS LOSE UP TO $5/MT FOR NOT COVERING ENOUGH SUPPLIERS - INTEGR8 FUELS
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Tuesday, 07 December 21
SUPERCYCLE DEMAND: ARE WE THERE YET? - WOOD MACKENZIE
Taking young children on a long journey is fraught with challenges, not least the inevitable question a few minutes after leaving: are we there yet ...
Tuesday, 07 December 21
COAL WOULD REMAIN ENERGY LEADER FOR AT LEAST 15 YEARS - LIVEMINT
Coal India Ltd (CIL) has been in the eye of the storm after fuel stocks at coal-fuelled power plants depleted in October. Fuel stocks since are bei ...
Tuesday, 07 December 21
GLOBAL SHIPPING OUTLOOK TURNS STABLE FROM POSITIVE ON THE BACK OF PEAKING EARNINGS DURING 2021 - MOODY'S
The outlook for the global shipping industry is changed to stable from positive for the next 12 to 18 months due to demand slightly outstripping su ...
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- CNBM International Corporation - China
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Planning Commission, India
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- Cement Manufacturers Association - India
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- VISA Power Limited - India
- GMR Energy Limited - India
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- Parliament of New Zealand
- The University of Queensland
- Mercuria Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Riau Bara Harum - Indonesia
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Africa Commodities Group - South Africa
- Australian Coal Association
- Thai Mozambique Logistica
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Manunggal Multi Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
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