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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, 17 April 20
PANDEMIC TO BRING ASIA'S 2020 GROWTH TO HALT FOR 1ST TIME IN 60 YEARS - IMF: REUTERS
Asia’s economic growth this year will grind to a halt for the first time in 60 years, as the coronavirus crisis takes an “unprecedented ...
Friday, 17 April 20
OPEC BRACES FOR OIL MARKET'S "HISTORIC SHOCK"
OPEC released its much anticipated April monthly report.
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Friday, 17 April 20
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Friday, 17 April 20
SEABORNE COAL PRICES UNDER PRESSURE AS DEMAND SOFTENS IN CHINA, INDIA - CLYDE RUSSELL
Worrying signs are emerging for coal exporters to the world’s biggest markets in Asia, as top buyers China and India move to favour domestic ...
Thursday, 16 April 20
THERMAL POWER SECTOR FACES BLEAK SCENARIO POST-COVID SITUATION - THE HINDU BUSINESS LINE
The centre should take a fresh look at coal-energy value chain as the sector tops the chart on loan defaults.
Covid-19 may have serv ...
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- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- Minerals Council of Australia
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Bangladesh Power Developement Board
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Videocon Industries ltd - India
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- Australian Coal Association
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Vizag Seaport Private Limited - India
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- The University of Queensland
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Edison Trading Spa - Italy
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
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