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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, 24 June 19
KOMIPO INVITED BITUMINOUS COAL BIDS FOR BORYEONG & SHIN BORYEONG POWER PLANTS
South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 260,000 MT MT of min. 5700 NAR coal and 240,000 MT of min. 4,600 k ...
Sunday, 23 June 19
SUPRAMAX: A 56,000-DWT WAS FIXED FROM INDONESIA TO VIETNAM AT $10,000 - BALTIC BRIEFING
Capesize
The story over the past week has been largely Atlantic dominated as the basin’s uniquely volatile characteristics came into play ...
Saturday, 22 June 19
OPEC'S BATTLE FOR CONTROL OF THE OIL MARKET - WOOD MACKENZIE
Oil supply is confounding expectations. We have just raised our forecasts for non-OPEC production, the latest in a series of incremental increases. ...
Friday, 21 June 19
INDONESIA'S BAYAN RESOURCES SIGNED A COAL SUPPLY AGREEMENT WITH THE BANGLADESH BCPCL TO SUPPLY 23 MILLION TONS OF COAL FOR 10 YEARS
On Monday, 17th June 2019, PT. Bayan Resources signed a Coal supply Agreement with the Bangladesh- China Power Company (Pvt.) Limited. BCPCL is a j ...
Thursday, 20 June 19
BUMI RESOURCES EXPECTS TO SELL 42 MILLION TONS OF COAL IN FIRST HALF - JAKARTA POST
PT Bumi Resources (BUMI), Indonesia's largest thermal coal miner, expects to close the first half of this year with coal sales of 42 million to ...
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- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- White Energy Company Limited
- Planning Commission, India
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- IHS Mccloskey Coal Group - USA
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Port Waratah Coal Services - Australia
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Thai Mozambique Logistica
- Parliament of New Zealand
- Romanian Commodities Exchange
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Kobexindo Tractors - Indoneisa
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- MS Steel International - UAE
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
- Tamil Nadu electricity Board
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
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