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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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Monday, 23 September 19
CHINA RECORDS SLOWER GROWTH IN COAL PRODUCTION - XINHUA
The growth of China’s raw coal production slowed down in August, data from the National Bureau of Statistics (NBS) showed.
Aro ...
Friday, 20 September 19
INDIA TO INVITE BIDS FOR COMMERCIAL COAL MINING IN DECEMBER - MINISTER FOR COAL
India aims to begin the process of holding the first round of commercial coal mining auctions December end, Minister for Coal, Mines and Parliament ...
Friday, 20 September 19
INDIA: ECONOMIC SLOWDOWN IMPACTS COAL IMPORT CARGO IN H1 FY20 - PTI
Economic slowdown has impacted coal import cargo in the first half of this fiscal, as overall cargo growth at major ports registered a marginal gro ...
Wednesday, 18 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
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Tuesday, 17 September 19
PANAMA SHIP REGISTRY MODERNIZES SHIP REGISTRATION
The Panama Ship Registry has announced it will integrate in a single platform “Electronic Ship Registration System (ESRS)” the present ...
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- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- The University of Queensland
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Standard Chartered Bank - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Petron Corporation, Philippines
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- Economic Council, Georgia
- SN Aboitiz Power Inc, Philippines
- Trasteel International SA, Italy
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- The Treasury - Australian Government
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Australian Coal Association
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Eastern Coal Council - USA
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
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