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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, 06 May 20
KOSPO INVITED COAL BIDS FOR LOW CALORIFIC VALUE COAL
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 160,000 Metric Tons (MT) Low Calorific Value Coal for J ...
Wednesday, 06 May 20
COST CHALLENGES IN A US$20/BBL WORLD - WOOD MACKENZIE
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It’s going to g ...
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FLOATING STORAGE OF OIL CARGOES - STANDARD CLUB
KNOWLEDGE TO ELEVATE
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Wednesday, 06 May 20
IRON ORE TRADE REMAINS REMARKABLY RESILIENT THIS YEAR, AT LEAST IN ASIA - BANCHERO COSTA
Iron ore trade remains remarkably resilient this year, at least in Asia, despite the global economic impact from COVID-19. In the first 4 months of ...
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- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- AsiaOL BioFuels Corp., Philippines
- New Zealand Coal & Carbon
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Merrill Lynch Commodities Europe
- Madhucon Powers Ltd - India
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Parliament of New Zealand
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Star Paper Mills Limited - India
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- GMR Energy Limited - India
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- European Bulk Services B.V. - Netherlands
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Planning Commission, India
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
- MS Steel International - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
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