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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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Tuesday, 21 January 20
ASIA'S APPETITE FOR COAL GROWS, WITH CHINA THE KEY DECIDER - NIKKEI
Although renewable power generation is expected to rise significantly in Asia, India’s vast electricity needs will still underpin global dema ...
Tuesday, 21 January 20
THERMAL COAL PRICES SET FOR RECOVERY THIS YEAR AS OVERSUPPLY TIGHTENS - REUTERS
Thermal coal prices are expected to recover this year after losing around a third of their value last year as demand from some south-east Asian cou ...
Monday, 20 January 20
INDIA TO STOP SUBSTITUTABLE COAL IMPORT; CAN GO FOR AUCTION OF 100 FULLY EXPLORED NEW BLOCKS: JOSHI - PTI
The Cabinet recently approved promulgation of Mineral Laws (Amendment) Ordinance 2020 to amend Mines and Minerals (Development and Regulation ) Act ...
Monday, 20 January 20
CHINA DECEMBER COAL OUTPUT UP 2.4 PERCENT ON YEAR - STATS BUREAU: REUTERS
China produced 331.74 million tonnes of coal in December, up 2.4 percent on the year, the National Bureau of Statistics said on Friday.
...
Monday, 20 January 20
CHINA IMPORTED 124.4 MLN TONNES OF COAL FROM INDONESIA IN 2019, UP 15.1 PERCENT YOY - BANCHERO COSTA
China's coal imports raced ahead in 2019, surprising many who had expected that in the months of 2019 to come the government would clamp down s ...
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- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Vedanta Resources Plc - India
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- MS Steel International - UAE
- Chamber of Mines of South Africa
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- The University of Queensland
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Tamil Nadu electricity Board
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- London Commodity Brokers - England
- Australian Coal Association
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- Gujarat Sidhee Cement - India
- White Energy Company Limited
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