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