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