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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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Friday, 12 April 19
OFFSHORE MENA CONGRESS 2019
Offshore MENA Congress 2019
Event Date : 11-12th Jun. 2019
Location : Cairo, Egypt
Offshore MENA Congress 2019 Offshor ...
Friday, 12 April 19
U.S : MORE THAN 7 GW OF COAL-FIRED GENERATION IS SCHEDULED TO RETIRE BY THE END OF 2020 - EIA
EIA estimates that U.S. coal production decreased by 19 million short tons (MMst) (2%) in 2018, totaling 756 MMst.
EIA also expects ...
Friday, 12 April 19
GLENCORE WINS $520 MILLION DEAL TO SELL COAL TO MEXICO - REUTERS
Global trader Glencore has won contracts worth around $520 million to supply 4.94 million tonnes of coal to Mexico, state-run power utility the Fed ...
Thursday, 11 April 19
AUSTRALIAN COAL IN THE FRONTLINE OF CHINA'S SUPPLY GLUT - AUSTRALIAN FINANCIAL REVIEW
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Wednesday, 10 April 19
COALTRANS ASIA - TAKE PART IN THE LARGEST COAL EVENT IN THE WORLD!
Take part in the largest coal event in the world!
Coaltrans Asia is back this June bringing together the entire international coal s ...
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- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- PTC India Limited - India
- Edison Trading Spa - Italy
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Star Paper Mills Limited - India
- White Energy Company Limited
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- GMR Energy Limited - India
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- The University of Queensland
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Samtan Co., Ltd - South Korea
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Goldman Sachs - Singapore
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Global Business Power Corporation, Philippines
- McConnell Dowell - Australia
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Formosa Plastics Group - Taiwan
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