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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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Thursday, 01 July 21
WHY INDIA’S SOLAR POWER TARIFFS ARE CLIMBING AFTER HITTING RECORD LOWS LAST YEAR - IEEFA
What’s behind the recent increase?
Solar tariffs are deflationary. Prices have fallen by 75% in seven years in India, and in 2 ...
Thursday, 01 July 21
END TO COAL POWER BROUGHT FORWARD TO OCTOBER 2024
Press Release: The deadline to phase out coal from Great Britain's energy system has been brought forward by a whole year, highlighting the UK& ...
Thursday, 01 July 21
WHY BUILD 600 NEW UNPROFITABLE COAL PLANTS? - DEUTSCHE WELLE
Governments in Asia are planning 600 new coal plants that could lose investors $150 billion and derail efforts to limit temperature rise in line wi ...
Thursday, 01 July 21
FIVE ASIAN COUNTRIES ACCOUNT FOR 80% OF NEW COAL POWER INVESTMENT - THE GUARDIAN
Five Asian countries are jeopardising global climate ambitions by investing in 80% of the world’s planned new coal plants, according to a rep ...
Wednesday, 30 June 21
DELTA DUNIA MAKMUR RECORDED AN IMPROVED REVENUE IN Q1 2021; REVENUE INCREASED BY 49% QOQ TO US$160 MILLION ON THE BACK OF COAL PRICE RECOVERY
PT Delta Dunia Makmur Tbk. (“DOID”) released its consolidated financial and operating results that include its primary and wholly-owned ...
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- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Standard Chartered Bank - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Coalindo Energy - Indonesia
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Grasim Industreis Ltd - India
- IEA Clean Coal Centre - UK
- Iligan Light & Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- Renaissance Capital - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Parry Sugars Refinery, India
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Ind-Barath Power Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Aditya Birla Group - India
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Global Business Power Corporation, Philippines
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Medco Energi Mining Internasional
- Indonesian Coal Mining Association
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kohat Cement Company Ltd. - Pakistan
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
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