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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, 23 January 20
AFRICAN POWER PLATFORM PUBLISHES REPORTS ON POWER SECTOR FRAMEWORK FOR SELECTED AFRICAN COUNTRIES
Press Release: African Power Platform publishes Reports on Power Sector Framework for selected African Countries
With the repo ...
Thursday, 23 January 20
COAL-BASED ELECTRICITY GENERATION SURGES 95% IN 2019 - PROFIT PAKISTAN TODAY
Coal-based power generation jumped 94.5 percent to 2,030 Gigawatt hours (GWh) in the year to November 2019, taking its share in the country’s ...
Wednesday, 22 January 20
INDIA: COAL PRODUCTION FROM CAPTIVE MINES RAISES 24% OUTPUT IN APRIL TO DECEMBER - FINANCIAL EXPRESS
Coal production from captive mines in the first nine months of the ongoing financial year was up 24% year-on-year (y-o-y) at 40.93 million tonne (M ...
Wednesday, 22 January 20
SHIPPING MARKET INSIGHT - INTERMODAL
It seems that we are finally seeing whitish smoke as far as the trade feud between the US and China is concerned, while following this much anticip ...
Tuesday, 21 January 20
IRON ORE - 5 THINGS TO WATCH IN 2020 - WOOD MACKENZIE
Wood Mackenzie identifies five trends that will impact the iron ore industry.
Slower demand growth (especially in China) and a decen ...
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- India Bulls Power Limited - India
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- The University of Queensland
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- Jaiprakash Power Ventures ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- White Energy Company Limited
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Australian Coal Association
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Tata Chemicals Ltd - India
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Grasim Industreis Ltd - India
- Binh Thuan Hamico - Vietnam
- Directorate Of Revenue Intelligence - India
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- Planning Commission, India
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Minerals Council of Australia
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Kaltim Prima Coal - Indonesia
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
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