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