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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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Saturday, 20 June 20
NO ESCAPING GLOBAL TRADE SLUMP - BALTIC EXCHANGE
Those hoping for a decent recovery in trade in the second half of the year should prepare for disappointment.
New data from the Unit ...
Friday, 19 June 20
INDIA'S COAL CONSUMPTION GROWTH IN 2019 SLOWEST SINCE 2001: BP STATS REVIEW - HINDU BUSINESS LINE
Growth in global energy markets slowed in 2019 in line with weaker economic growth, according to the bp Statistical Review of World Energy 2020. Th ...
Friday, 19 June 20
KOWEPO TO IMPORT 1,050,000 MT OF MIN 5300 NCV COAL FOR THREE YEARS
COALspot.com: Korera Western Power Co., Ltd. (KOWEPO) has issued an International tender for Total 1,050k MT Min.5,300 kcal/kg NCV coal for t ...
Thursday, 18 June 20
INDIA: GOVT'S PLAN TO CUT COAL IMPORT GOES FOR A TOSS AS FY20 BREAKS LOGISTICS CHAIN; LOCAL OUTPUT STAGNANT - FINANCIAL EXPRESS
Weak logistics support and disrupted supply chain towards the end of the last financial year 2019-20 hit the government’s plan to cut coal im ...
Thursday, 18 June 20
INDIA: THERMAL PLANTS TO OPERATE BELOW 53% CAPACITY IN FY21 AS POWER DEMAND DIPS - BUSINESS STANDARD
The Plant Load Factor (PLF) of thermal power stations across the country is projected to dip below 53 per cent in this fiscal. Muted power demand f ...
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- Aboitiz Power Corporation - Philippines
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Trasteel International SA, Italy
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Mercator Lines Limited - India
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- White Energy Company Limited
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- ICICI Bank Limited - India
- London Commodity Brokers - England
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- VISA Power Limited - India
- Indika Energy - Indonesia
- Central Electricity Authority - India
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Planning Commission, India
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Maheswari Brothers Coal Limited - India
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Sical Logistics Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
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