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