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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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Thursday, 11 June 20
JAN-MAY, INDONESIA SHIPPED 175.15 MILLION TONS OF COAL TO ITS OVERSEAS BUYERS
Indonesia's coal production for the first 5 months of this year have reached 228 million tons. January – May 2020, Indonesia shipped US$ ...
Thursday, 11 June 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Wednesday, 10 June 20
OPEC+ CUTS EXTENSION TO ACCELERATE MARKET REBALANCING - FITCH RATINGS
Fitch Ratings-London-08 June 2020: The OPEC+ agreement to extend by one month record oil production cuts should accelerate market rebalancing, Fitc ...
Wednesday, 10 June 20
MARKET INSIGHT - INTERMODAL
In contrast to the economic projections of the past two years for the first half of 2020, the oil & gas industry and those involved in it faced ...
Wednesday, 10 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.19 PCT - XINHUA
China Taiyuan coal transaction price index stood at 123.71 points Monday, down 0.19 percent week on week.
The index, released by Chi ...
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- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Coalindo Energy - Indonesia
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- Mercator Lines Limited - India
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Ambuja Cements Ltd - India
- Planning Commission, India
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Sojitz Corporation - Japan
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Renaissance Capital - South Africa
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Merrill Lynch Commodities Europe
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