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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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Wednesday, 10 April 19
KOSPO INVITED BIDS FOR 160K MT OF MIN. 3700 NCV COAL FOR JUNE LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 160,000 MT of min. 3,800 Kcal/kg ~max.4,100 ...
Wednesday, 10 April 19
CHINA'S GROWING THERMAL COAL SUPPLY TO PRESSURE EXPORTERS - FITCH RATINGS
Growing Chinese thermal coal supply is likely to lead to further tightening of import controls by the government, putting pressure on seaborne coal ...
Wednesday, 10 April 19
SHIPPING MARKET INSIGHT - INTERMODAL
The tragedy in Brazil’s Vale Brumadinho where a tailings dam collapsed in January ranks among the world’s worst mining disasters. It co ...
Monday, 08 April 19
5TH INDIA NUCLEAR NEW BUILD CONGRESS 2019
5th India Nuclear New Build Congress 2019
The congress in Mumbai aims to bring together representatives from governments, regulators ...
Monday, 08 April 19
THERMAL COAL PRICES FALL, INDIAN POWER PLANTS TO SEE LIMITED GAINS - BUSINESS STANDARD
Thermal coal prices are on a downward spiral globally. Australian coal prices have fallen nearly 20 per cent in the past week, and 40 per cent from ...
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- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- Economic Council, Georgia
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- Indika Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Australian Coal Association
- Global Business Power Corporation, Philippines
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Pendopo Energi Batubara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- Meenaskhi Energy Private Limited - India
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Thai Mozambique Logistica
- The University of Queensland
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- LBH Netherlands Bv - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- Indian Energy Exchange, India
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Minerals Council of Australia
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Singapore Mercantile Exchange
- Salva Resources Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
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