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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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Wednesday, 26 May 21
NEW POWER AND ENERGY MASTER PLAN MUST BE DESIGNED IN BANGLADESH'S BEST INTERESTS, NOT JAPAN'S - IEEFA
JICA must deliver a low or zero emissions plan as promised, not fund Matarbari 2 coal plant
Clear understandings from the Bangladesh ...
Tuesday, 25 May 21
KOREA SOUTHERN POWER INVITED BIDS FOR 870,000 MT OF MIN 5300 NCV COAL FOR 2021 TO 2023.
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for total 870,000 MT of Min 5,300 kcal/kg NCV coal for Augu ...
Tuesday, 25 May 21
CHINA’S COAL OUTPUT RISES IN FIRST FOUR MONTHS - XINHUA
China’s raw coal output rose 11.1 percent year on year to 1.29 billion tonnes in the first four months of 2021, official data showed.
&nb ...
Tuesday, 25 May 21
MARINE SHIPPERS BULK UP: ANOTHER GAME OF CHICKEN IN THE WORKS? - THE KOREA TIMES
Global shipping companies have been placing orders for large ships, with many anticipating further increased competition within the next three year ...
Friday, 21 May 21
MARKET INSIGHT - INTERMODAL
The dry bulk market’s counter seasonal surge so far into the first half of the year -in a sort of 2010 manner - and Capesize’s recent r ...
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- Wilmar Investment Holdings
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- Minerals Council of Australia
- TNB Fuel Sdn Bhd - Malaysia
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
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- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
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- Australian Coal Association
- Tata Chemicals Ltd - India
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- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
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- Kohat Cement Company Ltd. - Pakistan
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- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- White Energy Company Limited
- Parry Sugars Refinery, India
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Kideco Jaya Agung - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Energy Link Ltd, New Zealand
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Ministry of Transport, Egypt
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
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