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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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Wednesday, 20 November 19
FOREIGN DIRECT INVESTMENTS IN COMMERCIAL COAL MINING IN INDIA? - DIPESH DIPU
In August 2019, Government of India announced its approval for Foreign Direct Investment (FDI) for coal mining, processing and sale. Not that FDI i ...
Wednesday, 20 November 19
AUSTRALIA'S NEW HOPE POSTS 66% SURGE IN Q1 SALEABLE COAL OUTPUT - REUTERS
Australian coal producer New Hope Corp Ltd reported on Tuesday a 66% jump in saleable coal production in the first quarter, as output ramped up at ...
Wednesday, 20 November 19
THE IMO AND THE PRICE OF GAS OR THE IMPACT OF THE INTERNATIONAL MARITIME ORGANISATION'S SULPHUR 2020 LIMIT FOR MARINE FUEL OIL ON THE PRICE OF GAS - KING & SPALDING
The main bunker fuel for ships is High Sulphur Fuel Oil (HSFO, with sulphur up to 3.5% m/m (mass by mass)). This will all change on 1 January 2020 ...
Wednesday, 20 November 19
SHIPPING MARKET INSIGHT - INTERMODAL
While the market expects the next OPEC meeting, there are still no clear signs indicating that the organization will keep supporting oil prices, wh ...
Monday, 18 November 19
CHINA RECORDS STABLE COAL PRODUCTION IN JAN-OCT: XINHUA
China’s raw coal output registered stable growth in the first 10 months, while its imports remained robust, official data showed.
...
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- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Planning Commission, India
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Gujarat Sidhee Cement - India
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- Australian Coal Association
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Ministry of Transport, Egypt
- Semirara Mining Corp, Philippines
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- The University of Queensland
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chamber of Mines of South Africa
- Cement Manufacturers Association - India
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
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