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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, 28 September 21
THE MAIDEN EDITION OF DIVE TECHNOLOGY SUMMIT 2021 CONCLUDES SUCCESSFULLY
Press Release: DIVE TECHNOLOGY SUMMIT 2021, a one-day conference on the recent technological advancements in the Industrial Diving industry conclud ...
Monday, 27 September 21
CHINESE COAL FIRMS MEET TO ADDRESS WINTER SUPPLY CHALLENGES - CNBC
Major Chinese coal producers are trying to resolve supply shortages and curb price rises as the country’s winter consumption peak approaches, ...
Saturday, 25 September 21
HIGH STAKES FOR ASIAN DEVELOPMENT BANK’S AMBITIOUS COAL POWER RETIREMENT PLAN - IEEFA
Implementation challenges could block funding for other equally important high impact clean energy funding strategies
In the lead up ...
Thursday, 23 September 21
LONGER COAL CONTRACTS MAY REIN IN PRICES - ECNS
In China’s coal sector that has been marred recently by price surges, regional authorities and related enterprises should ensure the fuel con ...
Thursday, 23 September 21
BALTIC INDEX HITS 12-YEAR PEAK ON FIRMER VESSELS RATES - REUTERS
The Baltic Exchange’s main dry bulk sea freight index rose for a fourth straight session on Wednesday to a 12-year high, buoyed by higher rat ...
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- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Bhatia International Limited - India
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Tata Chemicals Ltd - India
- Oldendorff Carriers - Singapore
- Metalloyd Limited - United Kingdom
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Georgia Ports Authority, United States
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Cement Manufacturers Association - India
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- The University of Queensland
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Heidelberg Cement - Germany
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Marubeni Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ind-Barath Power Infra Limited - India
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Binh Thuan Hamico - Vietnam
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- GN Power Mariveles Coal Plant, Philippines
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- SMC Global Power, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Gujarat Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Aboitiz Power Corporation - Philippines
- Minerals Council of Australia
- Parry Sugars Refinery, India
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- Aditya Birla Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
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