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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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Saturday, 05 June 21
IT'S TIME FOR THE BIDEN ADMINISTRATION TO CHAMPION RENEWABLE ENERGY IN THE PHILIPPINES, NOT NUCLEAR OR FOSSIL GAS - IEEFA
Fossil gas and nuclear investments risk locking in costly, outdated infrastructure for the long-term
The United States has spent the ...
Friday, 04 June 21
NEW COAL-FIRED POWER PLANTS IN INDIA WILL BE ECONOMICALLY UNVIABLE - IEEFA
Coal capacity additions face major stranded asset risk
Much of India’s 33 gigawatts (GW) of coal-fired power capacity currently under co ...
Thursday, 03 June 21
JUNE HBA IS HITTING ABOVE $100 AND SETTLED AT ITS HIGHEST SINCE OCTOBER 2020
COALspot.com: The Indonesia coal price reference for June 2021 settles at US$ 100.33 per ton FOB vessel.
The Indonesia coal pr ...
Wednesday, 02 June 21
INDONESIA RV WAS DOWN TO LOW/MID $20,000S DAY FOR PANAMAX/KAMSARMAX WITH DELIVERY S CHINA - BANCHERO COSTA
Panamax
A softening week in the Pacific basin with rates under a downward pressure mainly caused by the oversupply of tonnage in the area, said ...
Wednesday, 02 June 21
EUROPEAN UNION'S IRON ORE IMPORTS - BANCHERO COSTA
The European Union (27) is currently the fourth largest importer of iron ore in the world, after China, Japan, and South Korea.
Euro ...
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- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Parliament of New Zealand
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Chamber of Mines of South Africa
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Sakthi Sugars Limited - India
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Romanian Commodities Exchange
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
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