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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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SEABORNE COAL IMPORTS INTO INDIA INCREASED BY +9.9% Y-O-Y TO 146.6 MLN T - BANCHERO COSTA
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EXERCISE CAUTION WITH AMMONIA SWITCH - BALTIC EXCHANGE
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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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- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Minerals Council of Australia
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- Australian Coal Association
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- IHS Mccloskey Coal Group - USA
- Semirara Mining Corp, Philippines
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- Renaissance Capital - South Africa
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Madhucon Powers Ltd - India
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
- Vizag Seaport Private Limited - India
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Bhatia International Limited - India
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
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