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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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Tuesday, 09 June 20
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KNOWLEDGE TO ELEVATE
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Tuesday, 09 June 20
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Monday, 08 June 20
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Monday, 08 June 20
JUNE 2020 INDONESIAN COAL PRICE REFERENCE HIT US$ 52.98 A TON, ITS LOWEST LEVEL SINCE AT LEAST AUGUST 2016
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
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- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Sojitz Corporation - Japan
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Mercator Lines Limited - India
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- SN Aboitiz Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- ASAPP Information Group - India
- Posco Energy - South Korea
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Australian Coal Association
- Central Java Power - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Port Waratah Coal Services - Australia
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- India Bulls Power Limited - India
- McConnell Dowell - Australia
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