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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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Sunday, 18 April 21
INDONESIA LIKELY TO WITNESS 119 OIL AND GAS PROJECTS STARTS ACROSS VALUE CHAIN BY 2025, SAYS GLOBALDATA
Indonesia is expected to witness 119 oil and gas projects commencing their operations across value chain during 2021-2025, accounting for 6% of the ...
Sunday, 18 April 21
WORLDSTEEL RAISES 2021 STEEL DEMAND GROWTH FORECAST TO 5.8% - WORLDSTEEL
The World Steel Association (worldsteel) today released its Short Range Outlook (SRO) for 2021 and 2022. worldsteel forecasts that steel demand wil ...
Sunday, 18 April 21
CHINA'S Q1 COAL OUTPUT RISES 16% ON STRONG DEMAND FOR WINTER HEATING - REUTERS
China’s coal output rose 16% in the first quarter from the same period last year, bolstered by strong demand for winter heating and robust in ...
Wednesday, 14 April 21
INDIA HAS A RECORD LEVEL OF STOCKPILED COAL DAMPENING NEED FOR NEW DOMESTIC MINES - IEEFA
Proposed coal mining expansions at odds with excess supply
India has stockpiled a record 132 million tonnes of coal – enough t ...
Wednesday, 14 April 21
BANGLADESH NEEDS A RENEWABLES FOCUS, NOT A SWITCH FROM 'COAL TO GAS' - IEEFA
Renewables are cheaper and more sustainable than gas imports, and can provide better energy security in developing nations
The emerg ...
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- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- GMR Energy Limited - India
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- PetroVietnam Power Coal Import and Supply Company
- Metalloyd Limited - United Kingdom
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- Australian Commodity Traders Exchange
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
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