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