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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, 01 December 23
COAL MINERS GROUP EXPECTS INDONESIA’S 2023 COAL OUTPUT TO SURPASS TARGET - REUTERS
The Indonesian Coal Mining Association (ICMA) expects the country’s 2023 coal output to surpass the official target of 695 million metric ton ...
Friday, 24 November 23
COAL IMPORTS TO INDIA IN OCTOBER 2023 REACHED HIGHEST LEVELS IN NEARLY A YEAR AND A HALF - VESSELSVALUE, VESON NAUTICAL
In October, coal imports to India reached 13.8 mt in October 2023, according to Oceanbolt, a Veson Nautical solution, the highest level since May 2 ...
Friday, 24 November 23
COAL SHIPMENTS TO ADVANCED ECONOMIES DOWN 17% SO FAR IN 2023 - BIMCO
In the first ten months of 2023, coal shipments to advanced economies fell by 17% y/y, as demand for electricity declined and the share of electric ...
Friday, 24 November 23
INTELLIGENT COAL MINES CONTRIBUTE TO IMPROVING SAFETY STANDARDS - CHINA DAILY
Mechanization, automation and intelligent upgrades have contributed to improved safety in coal mines, though the level of development of intelligen ...
Friday, 24 November 23
WHY AUSTRALIA'S COAL MINES ARE GETTING BIGGER - IEEFA
Australia’s largest coal mines are getting larger. Mines in New South Wales (NSW) are ramping up production following the state’s recov ...
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- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Australian Coal Association
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- VISA Power Limited - India
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Indo Tambangraya Megah - Indonesia
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Parry Sugars Refinery, India
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Minerals Council of Australia
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Iligan Light & Power Inc, Philippines
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