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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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Friday, 29 January 21
COAL EXPORTS FROM AUSTRALIA TO MAINLAND CHINA DECLINED BY -22.2% Y-O-Y IN 2020 - BANCHERO COSTA
In the 12 months of 2020, global seaborne coal trade declined by as much as -12.7% year-on-year, according to vessel tracking data from Refinitiv, ...
Friday, 29 January 21
OPEC+, COVID-19 AND ENERGY TRANSITION - 3 THEMES IMPACTING OIL MARKETS AND REFINING IN 2021 - WOOD MACKENZIE
Wood Mackenzie’s latest outlook report shows that the art of balancing oil markets and the refining sector in 2021 hinges upon three key them ...
Thursday, 28 January 21
STRONG CHINESE THERMAL COAL IMPORTS TO BENEFIT INDONESIAN MINERS IN THE NEAR TERM - FITCH RATINGS
China's thermal coal imports are likely to remain strong ahead of the Chinese New Year in mid-February on robust demand, high utilisation at do ...
Thursday, 28 January 21
WIND PROPULSION FOR DRY BULK CARRIERS - OLDENDORFF
Oldendorff Carriers (OC) has signed a Joint Development Project (JDP) with Anemoi Marine Technologies (Anemoi), Lloyd’s Register (LR) and Sha ...
Thursday, 28 January 21
BUMA PRICED A USD400 MILLION 7.75% 5-YEAR SENIOR NOTES
PT Delta Dunia Makmur Tbk. announced that its subsidiary, PT Bukit Makmur Mandiri Utama priced a USD400 million 5-year (non-callable 2-year)& ...
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- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- White Energy Company Limited
- Wood Mackenzie - Singapore
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Heidelberg Cement - Germany
- Minerals Council of Australia
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- Salva Resources Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- Australian Coal Association
- The Treasury - Australian Government
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- ASAPP Information Group - India
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- Sakthi Sugars Limited - India
- Simpson Spence & Young - Indonesia
- Electricity Authority, New Zealand
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vizag Seaport Private Limited - India
- Larsen & Toubro Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- New Zealand Coal & Carbon
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Parry Sugars Refinery, India
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Riau Bara Harum - Indonesia
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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