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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, 24 July 20
IPA: THERMAL COAL IMPORTS AT MAJOR PORTS DECLINE 35 PC TO 17.71 MT IN APR TO JUNE - ECONOMIC TIMES
These ports had handled 27.13 MT of thermal coal and 14.95 MT of coking coal in the April-June period of the previous financial year
...
Thursday, 23 July 20
KOREAN GENCOS INVITED BIDS FOR TOTAL 1.36 MILLION TONS OF BITUMINOUS COAL FOR OCTOBER 2020 LOADING
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) on behalf of EWP, KOSPO, KOSEP and KOWEPO has issued an international tender for total 1,360,00 ...
Wednesday, 22 July 20
CIL'S COAL SUPPLY TO POWER SECTOR DROPS OVER 21% TO 93.5 MT IN APR-JUN QUARTER - PTI
The supply of coal by state-owned Coal India Ltd to the power sector fell 21.7 percent to 93.5 million tonnes (MT) in the first quarter of the ongo ...
Monday, 20 July 20
KOREA MIDLAND POWER INVITED BIDS FOR TOTAL 2.520 MILLION MT OF BITUMINOUS COAL FOR THREE YEARS
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO), has issued an international tender for total 840,000 of Bituminous Coal to be used at Bo ...
Monday, 20 July 20
CHINA'S JUNE COAL OUTPUT FALLS 1.2% YEAR-ON-YEAR OVER ILLEGAL MINING CHECKS - REUTERS
China’s coal output dropped 1.2% in June on the year to 330 million tonnes, official data showed, as major coal mining areas cracked down on ...
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- Simpson Spence & Young - Indonesia
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Minerals Council of Australia
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- Ceylon Electricity Board - Sri Lanka
- ICICI Bank Limited - India
- International Coal Ventures Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Mercator Lines Limited - India
- Planning Commission, India
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Edison Trading Spa - Italy
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- TeaM Sual Corporation - Philippines
- Carbofer General Trading SA - India
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- Wood Mackenzie - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Central Java Power - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Kideco Jaya Agung - Indonesia
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Energy Development Corp, Philippines
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
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