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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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Tuesday, 31 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.43 PCT - XINHUA
China Taiyuan coal transaction price index stood at 132.17 points Monday, down 0.43 percent week on week.
The index, released by Chi ...
Tuesday, 31 March 20
COAL POWER REMAINS IN GLOBAL DECLINE, DESPITE CHINESE SURGE - SYDNEY MORNING HERALD
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Monday, 30 March 20
CORONAVIRUS - IMPLICATIONS FOR SHIPS AND CREW - GARD
KNOWLEDGE TO ELEVATE
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LAY-UP AND RE-ACTIVATION REVISITED - GARD
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The COVID-19 pandemic has affected the maritime industry in previously unthinkable ways. Ports around the world are denyi ...
Monday, 30 March 20
PANAMAX: INDONESIA LACKED VOLUME, PARTLY DUE TO FORCE MAJEURE IN INDIAN PORTS - BALTIC BRIEFING
Capesize
As Covid-19 continued to ratchet up tensions across the globe, the Cape market dealt with the change to remote working. Most regions o ...
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- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Posco Energy - South Korea
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Orica Mining Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Electricity Authority, New Zealand
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Agrawal Coal Company - India
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- India Bulls Power Limited - India
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Ambuja Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Kideco Jaya Agung - Indonesia
- Timah Investasi Mineral - Indoneisa
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Indika Energy - Indonesia
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- PTC India Limited - India
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
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