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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, 02 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.86 PCT - XINHUA
China Taiyuan coal transaction price index stood at 123.95 points Monday, down 0.86 percent week on week.
The index, released by Chi ...
Monday, 01 June 20
SUPRAMAX: IN SOUTH EAST ASIA RATES TRADED SIDEWAYS - BALTIC BRIEFING
Capesize
A sober end to the week, with the market seemingly ready for the weekend. After a steady week of rate declines a small flurry of Atlan ...
Friday, 29 May 20
COVID-19: COAL SUPPLY BY CIL TO POWER SECTOR DIPS 22% TO 32 MT IN APRIL DUE TO DEMAND SLUMP - PTI
Over 95% of CIL’s production comes from its 171 open cast mines.
The supply of coal to the power sector by state-owned Coal In ...
Friday, 29 May 20
AUSTRALIA'S NEW HOPE WARNS OF HIT FROM COAL PRICE SLUMP - REUTERS
Australia’s New Hope Corp Ltd said on Thursday that a sudden drop in thermal coal prices and lower output from its Queensland operations woul ...
Friday, 29 May 20
GOVT MAY LAUNCH COAL BLOCKS AUCTION PROCESS UNDER COMMERCIAL MINING ON JUN 11 - PTI
The Centre is likely to launch the process of coal blocks auction under commercial mining on June 11 and around 50 mines are expected to go under t ...
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- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Australian Coal Association
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Baramulti Group, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- Kumho Petrochemical, South Korea
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Georgia Ports Authority, United States
- Economic Council, Georgia
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Deloitte Consulting - India
- CNBM International Corporation - China
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Central Java Power - Indonesia
- MS Steel International - UAE
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- San Jose City I Power Corp, Philippines
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- Ambuja Cements Ltd - India
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Asmin Koalindo Tuhup - Indonesia
- Star Paper Mills Limited - India
- White Energy Company Limited
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Banpu Public Company Limited - Thailand
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