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