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