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