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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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Wednesday, 22 November 23
INDIA: GOVERNMENT PLANS 1.4 BILLION TONNE COAL OUTPUT BY 2027 - LIVEMINT
The Union coal ministry on Monday announced plans to increase India’s coal production to 1.404 billion tonne by 2027, with an eye to further ...
Wednesday, 22 November 23
OBLIGATION. INDONESIA AIMS TO START COLLECTING LEVIES FROM COAL MINERS IN JANUARY - REUTERS
Indonesia plans to start collecting levies from coal miners in January to be used to compensate miners who sell coal to the state utility at lower ...
Tuesday, 21 November 23
INDIAN COAL POWER PLANTS’ CAPACITY UTILISATION WILL IMPROVE TO 65% THIS FISCAL: - CRISIL
Coal-based thermal power units’ plant load factor (PLF) or capacity utilisation will improve to 65 percent in the current fiscal year despite ...
Tuesday, 14 November 23
CAPITAL PRODUCT PARTNERS L.P. ANNOUNCES TRANSFORMATIVE TRANSACTION INCLUDING THE ACQUISITION OF 11 NEWBUILD LNG CARRIERS FOR $3.1 BILLION
Capital Product Partners L.P. announced that it has entered into an umbrella agreement (the “Umbrella Agreement”) with Capital Maritime ...
Tuesday, 14 November 23
COAL INDIA BEATS Q2 PROFIT VIEW ON HIGH POWER DEMAND AMID WEAK MONSOON - REUTERS
Coal India on Friday reported better-than-expected second-quarter profit, helped by high power demand and boosted production amid a weak monsoon.
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- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Orica Mining Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Posco Energy - South Korea
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- Dalmia Cement Bharat India
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Interocean Group of Companies - India
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Coal and Oil Company - UAE
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Indogreen Group - Indonesia
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
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