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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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Friday, 01 May 20
GLOBAL COAL DEMAND TO FALL BY 8% IN Q1 2020 RELATIVE TO Q1 2019 - IEA
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Friday, 01 May 20
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- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Parliament of New Zealand
- New Zealand Coal & Carbon
- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Xindia Steels Limited - India
- Minerals Council of Australia
- London Commodity Brokers - England
- The University of Queensland
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Ministry of Mines - Canada
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