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