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