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