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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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Sunday, 10 September 23
CHINA AUGUST COAL IMPORTS OF 44.3 MLN T HIT RECORD - REUTERS
China, the world’s top coal consumer, imported 44.3 million metric tons of the fuel last month, customs data showed, the highest amount in an ...
Tuesday, 22 August 23
CHINA'S COAL PRODUCTION LOGS STEADY GROWTH IN JANUARY-JULY: XINHUA
China’s output of raw coal went up 3.6 percent year on year in the first seven months of this year, official data showed.
The ...
Sunday, 13 August 23
THE COMMODITIES FEED: LNG SUPPLY RISKS LINGER - ING
Energy – OPEC sees deficit over remainder of 2023
Oil prices came under some pressure yesterday with ICE Brent settling a litt ...
Wednesday, 09 August 23
COAL TRADE TO RETURN TO 2019 LEVELS - BALTIC EXCHANGE
The International Energy Agency’s mid-year Coal Market Update for 2023 brings both positive and concerning news for the global coal industry. ...
Sunday, 23 July 23
ANALYSIS-INDIA'S COAL MINING BET STUMBLES AS WARY BANKS WEIGH RISING RISKS - REUTERS
India’s drive to ramp up coal output to meet growing energy demand is faltering due to banks’ reluctance to finance newly auctioned min ...
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- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Karbindo Abesyapradhi - Indoneisa
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- White Energy Company Limited
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Essar Steel Hazira Ltd - India
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Trasteel International SA, Italy
- Vijayanagar Sugar Pvt Ltd - India
- Mercator Lines Limited - India
- PTC India Limited - India
- Economic Council, Georgia
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- Interocean Group of Companies - India
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- Singapore Mercantile Exchange
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Bhatia International Limited - India
- Carbofer General Trading SA - India
- Australian Coal Association
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
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