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