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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, 14 February 20
KOWEPO INVITED BIDS FOR 1.275 MILLION TONS OF MIN. 5,600 NCV COAL
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Friday, 14 February 20
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Thursday, 13 February 20
INDIA: MAJOR PORTS SHOW MUTED GROWTH IN CARGO AS THERMAL COAL VOLUME SLIDES 15% - BUSINESS STANDARD
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REFINING SET FOR A CHALLENGING 2020 - WOOD MACKENZIE
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- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Australian Coal Association
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- The University of Queensland
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- ICICI Bank Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
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