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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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Wednesday, 27 May 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.94 PCT - XINHUA
China Taiyuan coal transaction price index stood at 125.03 points Monday, up 0.94 percent week on week.
The index, released by China ...
Monday, 25 May 20
NON-OPEC OIL SUPPLY DEVELOPMENT - OPEC
Non-OPEC oil supply continued to increase by 2.0 mb/d in 2019, driven by US shale production, which rose by 1.7 mb/d, amounting to 84% of total non ...
Sunday, 24 May 20
A 63,000 FIXED DELIVERY VIETNAM TRIP VIA INDONESIA REDELIVERY KOSICHANG AT $8,500 - BALTIC BRIEFING
Capesize
After a week of bounce momentum the market appears to have stalled out once again. The Capesize 5TC has more than doubled since last F ...
Saturday, 23 May 20
COLOMBIA COAL OUTPUT DOWN 7.2% IN Q1 ON LOW PRICES, CORONAVIRUS LOCKDOWN - REUTERS
Coal production in Colombia, the world’s fifth-largest coal exporter, fell 7.2% in the first quarter because of low prices and coronavirus qu ...
Saturday, 23 May 20
EWP INVITES BIDS FOR 840,000 METRIC TONS OF MIN 5700 NAR COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd (EWP) has Issued an International Tender for total Max 840,000 Metric Tons of min 5 ...
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- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- Independent Power Producers Association of India
- The Treasury - Australian Government
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Australian Coal Association
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- CNBM International Corporation - China
- PTC India Limited - India
- Coal and Oil Company - UAE
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Orica Australia Pty. Ltd.
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- IHS Mccloskey Coal Group - USA
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Therma Luzon, Inc, Philippines
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Intertek Mineral Services - Indonesia
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- ASAPP Information Group - India
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- Bharathi Cement Corporation - India
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Sindya Power Generating Company Private Ltd
- Jindal Steel & Power Ltd - India
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
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