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