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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, 21 May 20
KOMIPO INVITED BIDS FOR TOTAL 610000 MT OF LCV AND HCV COAL FOR 2H 2020
COALspot.com: South Korea’s Korea Midland Power Co. Ltd. (KOMIPO) has Issued an International Tender for 130,000 mt of 5700 NCV coal an ...
Wednesday, 20 May 20
ADARO ENERGY BOOKED A 5% INCREASE IN COAL PRODUCTION VOLUME Y-O-Y IN 1Q2020
PT. Adaro Energy Tbk, Indonesia’s one of the largest coal miner, booked a 5% increase in coal production volume year-over-year in 1Q2020. The ...
Wednesday, 20 May 20
BRAZIL SOYBEAN EXPORTS HAVE BEEN SURGING THIS YEAR - BANCHERO COSTA
Brazil soybean exports have been surging this year, thanks to a combination of strong demand from China, a bumper crop, and favourable exchange rat ...
Wednesday, 20 May 20
MARKET INSIGHT
Seafarers keep maritime trade going so that the food, raw materials, energy and manufactured goods on which so many depend can continue moving arou ...
Tuesday, 19 May 20
AMENDMENT OF THE INDONESIAN MINING LAW: TYING UP LOOSE ENDS - UMBRA
KNOWLEDGE TO ELEVATE
The finalized draft of Law on the amendment of the Mining Law (Bill) was publicly released on 11 May 2020 and was then ap ...
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- Indo Tambangraya Megah - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Goldman Sachs - Singapore
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- Iligan Light & Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- Malabar Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Meenaskhi Energy Private Limited - India
- The University of Queensland
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- PTC India Limited - India
- Economic Council, Georgia
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- London Commodity Brokers - England
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Antam Resourcindo - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- Manunggal Multi Energi - Indonesia
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- VISA Power Limited - India
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
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