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