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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, 06 September 24
REBOUND IN OIL DEMAND COULD LIFT MARKET IN LATTER HALF OF 2024 - BIMCO
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Friday, 06 September 24
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Tuesday, 06 August 24
EXERCISE CAUTION WITH AMMONIA SWITCH - BALTIC EXCHANGE
A new study from the Massachusetts Institute of Technology (MIT) has thrown a spanner into the plan to transition ships from diesel fuel to ammonia ...
Friday, 02 August 24
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The recent surge in natural gas and coal prices has been so swift that the main benchmarks were roughly three times higher in 2022Q2 compared to a ...
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- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Planning Commission, India
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- Jindal Steel & Power Ltd - India
- Power Finance Corporation Ltd., India
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Posco Energy - South Korea
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- South Luzon Thermal Energy Corporation
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- PTC India Limited - India
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- Videocon Industries ltd - India
- Dalmia Cement Bharat India
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Semirara Mining and Power Corporation, Philippines
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
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