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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, 21 August 20
BHP COMMITS TO SELLING ITS THERMAL COALMINES WITHIN TWO YEARS - THE GUARDIAN
Move follows pressure from investors but company stops short of full exit from coalmining
BHP has announced it plans to sell off its ...
Thursday, 20 August 20
MINER BHP CONFIRMS PLANS TO EXIT THERMAL COAL SECTOR - THE SYDNEY MORNING HERALD
The head of mining giant BHP has laid out plans for a reshaping of its global operations by seeking to quit thermal coal mining, offload some cokin ...
Thursday, 20 August 20
LONDON RETAINS ARBITER CROWN - BALTIC EXCHANGE | HFW
Fears that the UK’s decision to leave the European Union would dent the reputation of the nation’s capital as the leader in maritime ar ...
Wednesday, 19 August 20
U.S. COAL STOCKPILES STEADILY INCREASE AFTER REACHING LOWEST LEVEL IN A DECADE IN 2019 - EIA
After reaching their lowest level in more than a decade in March 2019, U.S. coal stockpiles steadily increased to 152 million tons in April 2020, r ...
Wednesday, 19 August 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.26 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.92 points Monday, down 0.26 percent week on week.
The index, released by Chi ...
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- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Ministry of Mines - Canada
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- Mintek Dendrill Indonesia
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- Indogreen Group - Indonesia
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Aditya Birla Group - India
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- ASAPP Information Group - India
- Energy Development Corp, Philippines
- Posco Energy - South Korea
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- OPG Power Generation Pvt Ltd - India
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Borneo Indobara - Indonesia
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
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