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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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Thursday, 06 February 20
CHINESE DEMAND KEY UNCERTAINTY FOR SEABORNE COAL MARKET IN 2020 - THE BRICS POST
Coal trader Noble Resources head of research Rodrigo Echeverri Cardozo had penciled in a 3 Mt drop in Chinese import demand for 2020, but it could ...
Wednesday, 05 February 20
CORONAVIRUS AND THE SHIPPING INDUSTRY - WATSON, FARLEY & WILLIAMS
The continued spread of Coronavirus and governmental measures to minimise the impact is likely to affect the shipping industry and supply chain.
...
Wednesday, 05 February 20
INDONESIA'S COAL PRICE REFERENCE UP 1.46% IN FEBRUARY
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised up the benchmark price of Indonesian thermal co ...
Wednesday, 05 February 20
MARKET INSIGHT - INTERMODAL
The oil and gas industry benefitted from a strong and solid ground in the previous year. We witnessed a slow but steady increase in bunker’s ...
Wednesday, 05 February 20
RUSSIA EXPORTED 28.6 MLN TONNES OF LNG IN 2019 - REFINITIV
A lot of attention has been paid recently on the surge in LNG exports from the United States. However, another country which is seeing truly expone ...
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- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Parliament of New Zealand
- Commonwealth Bank - Australia
- McConnell Dowell - Australia
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- The University of Queensland
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Straits Asia Resources Limited - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Carbofer General Trading SA - India
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Bangladesh Power Developement Board
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- White Energy Company Limited
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Latin American Coal - Colombia
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