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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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Thursday, 17 December 20
CHINA'S BAN IS LESS OF A THREAT TO AUSTRALIA'S COAL INDUSTRY THAN INTERNATIONAL CLIMATE AMBITION - IEEFA
Australian coal exporters will survive this near-term political fight but there are longterm structural headwinds
The decision by Ch ...
Thursday, 17 December 20
BUMA SIGNED US$1.0 BILLION WORTH OF EXTENSION CONTRACT WITH BERAU COAL
PT Bukit Makmur Mandiri Utama, subsidiary of PT Delta Dunia Makmur Tbk., has extended its mining services contracts with PT Berau Coal, in relation ...
Wednesday, 16 December 20
INDONESIA 2020 COAL CONSUMPTION ESTIMATED AT 140-145 MLN TONNES - OFFICIAL, REUTERS REPORTED
Indonesia’s domestic coal consumption is estimated at 140-145 million tonnes this year, Dodik Ariyanto, an official at the energy ministry, t ...
Wednesday, 16 December 20
RUSSIA REVISES DOWN EXPORT EXPECTATION - FITCH
The Ministry of Economy of Russia, the world’s third largest thermal coal exporting country, released its annual forecasts ...
Wednesday, 16 December 20
INDIAN COAL IMPORTS TO REMAIN SUBDUED - FITCH RATINGS
Fitch Rating commented on Indian Coal Imports, Fitch said, coal imports by Indian utilities fell by about 24% yoy to 44 million tonnes (mt) i ...
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- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Coal and Oil Company - UAE
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sindya Power Generating Company Private Ltd
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- Posco Energy - South Korea
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Minerals Council of Australia
- Deloitte Consulting - India
- Latin American Coal - Colombia
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
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