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