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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, 17 December 19
AUSTRALIA ENERGY MARKET OPERATOR TURNS SCROOGE ON COAL LOBBY: RUSSELL
Australia, which vies with Indonesia for the title of the world’s largest coal exporter, is planning for an electricity future where use of t ...
Tuesday, 17 December 19
BACK TO FUTURE FOR BUSH AS AUSTRALIA CONSIDERS MOVING AWAY FROM COAL NEWCASTLE - HERALD
Looking backwards could show the way forward for regional communities planning for a future beyond mining.
One of Australia’s ...
Tuesday, 17 December 19
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.01 PCT - XINHUA
China Taiyuan coal transaction price index stood at 133.16 points, down 0.01 percent week on week.
The index, released by China Taiy ...
Tuesday, 17 December 19
YEAR 2019: IT IS LOOKING SET THAT THIS YEAR WILL BE ONE OF THE SLOWEST IN TERMS OF DRY BULK NEWBUILDING ACTIVITY - ALLIED
With just two weeks remaining before 2019 comes to an end, it is now looking set that this year will be one of the slowest in terms of dry bulk new ...
Monday, 16 December 19
ULTRAMAX: A 63,000DWT SHIP FIXING DELIVERY FOR A SINGAPORE TRIP VIA INDONESIA, FOR RE-DELIVERY TO CHINA AT $11,000 - BALTIC BRIEFING
Capesize
It was one-way traffic for the Capesize market this past week, with all routes giving up value. While downward momentum may have slowe ...
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Indonesian Coal Mining Association
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Wilmar Investment Holdings
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- The University of Queensland
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Malabar Cements Ltd - India
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- Economic Council, Georgia
- Larsen & Toubro Limited - India
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Aboitiz Power Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Planning Commission, India
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- Bayan Resources Tbk. - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Grasim Industreis Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Coastal Gujarat Power Limited - India
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
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