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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, 04 September 20
IN A DEEPENING DEBT HOLE OF $34 BILLION, INDONESIA’S PLN MUST STOP DIGGING - IEEFA
The utility has added IDR100 trillion in debt annually for the last five years
Utilities globally started changing the way they do business ye ...
Friday, 04 September 20
KOMIPO INVITED BIDS FOR AUSTRALIAN MIN 5,700 NCV COAL FOR NOVEMBER
COALspot.com: Korea Midland Power Co. Ltd, has issued an International tender for 260,000 MT Min.5,700 kcal/kg NCV coal November, 2020 loading. Acc ...
Thursday, 03 September 20
BRINGING SERVICES OF FTCCI CLOSER TO THE EXPORTERS AT GMR AIR CARGO COMPLEX AT SHAMSHABAD
Press Release: “FTCCI Trade Facilitation Services at your doorstep now” says J.S. Chandrashekar, IRS., Principal Commissioner of Custom ...
Thursday, 03 September 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Wednesday, 02 September 20
COAL PRODUCTION FALLS 7% IN APR-AUG; OFF TAKE DIPS 13.4% - FINANCIAL EXPRESS
In the month of August coal off take also increased 9.3% y-o-y to 44.34 MT as compared with 40.57 MT in the same period last year.
C ...
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- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Port Waratah Coal Services - Australia
- Tata Chemicals Ltd - India
- Global Business Power Corporation, Philippines
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- Australian Coal Association
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- Malabar Cements Ltd - India
- Planning Commission, India
- Antam Resourcindo - Indonesia
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Semirara Mining and Power Corporation, Philippines
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- LBH Netherlands Bv - Netherlands
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Central Electricity Authority - India
- VISA Power Limited - India
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Star Paper Mills Limited - India
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Indika Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- The University of Queensland
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
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