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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, 30 January 20
PRIVATE SECTOR COMPANIES SEEK 'LEVEL PLAYING FIELD' FOR COAL BLOCK AUCTION - PTI
Private sector companies scouting opportunities for commercial coal mining in the country are seeking a “level playing field” to encour ...
Thursday, 30 January 20
CAPE: WITH CHINESE NEW YEAR TAKING PLACE, THE RATES ARE REACHING FURTHER DISAPPOINTING LEVELS - FEARNLEYS
Cape
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Wednesday, 29 January 20
INDONESIA REMAINS AT THE TOP SPOT IN 2019 AS THE LARGEST SUPPLIER OF COAL TO INDIA WITH 91.3 MLN TONNES - BANCHERO COSTA
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Wednesday, 29 January 20
MARKET INSIGHT - INTERMODAL
Last week Libya’s oil production operations were disrupted as it was reported that local Libyan tribes interrupted output at the the El Feel ...
Tuesday, 28 January 20
INDONESIA - UNCERTAINTY OVER AVAILABILITY OF LSFO - THE STANDARD CLUB
The club has received reports that low sulphur fuel is not currently readily available in all Indonesian ports and that there are local shortages.
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- Petron Corporation, Philippines
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Borneo Indobara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Bulk Trading Sa - Switzerland
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Madhucon Powers Ltd - India
- Mjunction Services Limited - India
- VISA Power Limited - India
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- The State Trading Corporation of India Ltd
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Maharashtra Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Energy Link Ltd, New Zealand
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Larsen & Toubro Limited - India
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Vedanta Resources Plc - India
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- The University of Queensland
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Makarim & Taira - Indonesia
- Australian Coal Association
- Krishnapatnam Port Company Ltd. - India
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
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