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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, 21 February 20
INDIA: POTENTIAL INVESTORS SEEK MORE CLARITY ON COMMERCIAL COAL MINING NORMS - FINANCIAL EXPRESS
Potential private investors have sought more clarity on the pricing mechanism proposed for the much-anticipated auction for commercial coal mining. ...
Thursday, 20 February 20
CHINA RESUMES OVER 70 PCT COAL PRODUCTION CAPACITY AMID EPIDEMIC - XINHUA
China has resumed 70.2 percent of its coal production capacity with output recovering steadily amid the fight against the novel coronavirus epidemi ...
Thursday, 20 February 20
CHINA THERMAL COAL MARKET FACES 2-3 MONTH CORONAVIRUS SHORT SQUEEZE: NOBLE - REUTERS
China’s domestic thermal coal market faces a 2-3 month short squeeze as a rapidly spreading coronavirus outbreak curtails production more tha ...
Wednesday, 19 February 20
KOREA MIDLAND POWER INVITED BIDS FOR 1 MILLION TONS OF HCV AND LCV COAL FOR Q2- Q4 LOADING
COALspot.com: Korea Midland Power Co. Ltd, (KOMIPO). has issued an international tender for total 1 million MT of coal for April to December 2020 l ...
Wednesday, 19 February 20
GLENCORE WRITES OFF ALMOST $1 BILLION AT COLOMBIAN COAL MINES DUE TO FALLING EUROPEAN IMPORTS: BLOOMBERG
The economic case against European coal is proving too much for even Glencore Plc.
The world’s biggest coal shipper cut the va ...
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- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Singapore Mercantile Exchange
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Parliament of New Zealand
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Australian Coal Association
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Iligan Light & Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- White Energy Company Limited
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- Holcim Trading Pte Ltd - Singapore
- Anglo American - United Kingdom
- Planning Commission, India
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Energy Exchange, India
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- Thiess Contractors Indonesia
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- London Commodity Brokers - England
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Kaltim Prima Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
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