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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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Tuesday, 19 February 19
AUSTRALIA'S COAL FUTURE UNDER THREAT AS MORE CHANGES HIT FOSSIL FUELS GLOBALLY - ABC
Two disparate decisions from opposite corners of the world have sounded warnings for the future of Australia’s coal industry.
...
Tuesday, 19 February 19
FAST DEPLETING COAL RESERVES COULD PUSH UP ENERGY PRICES, CAUTIONS EXPERT - THE HINDU BUSINESS LINE
The fast depletion of coal, a strategic resource and India’s fuel of choice currently, has huge implications for energy costs, according to K ...
Monday, 18 February 19
INDIA'S COAL IMPORT FALLS TO 17.25 MT IN JANUARY - PTI
Coal imports saw a decline in January FY 2019 to 17.25 MT from 19.59 MT in the same month of the previous fiscal, according to a report by mjunctio ...
Monday, 18 February 19
THE ROLE OF COAL IN INDIA'S ENERGY AMBITIONS - WCA
India is the world’s second most populous country and figures among the world’s most rapidly growing economies.
The Sout ...
Saturday, 16 February 19
COALTRANS CHINA 2019, CHINA'S LARGEST COAL INDUSTRY GATHERING
Press Release: Coaltrans China 2019 | With the import ban likely to be lifted, it’s time for you to meet your potentia ...
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- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Thiess Contractors Indonesia
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Posco Energy - South Korea
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- Renaissance Capital - South Africa
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- White Energy Company Limited
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Dalmia Cement Bharat India
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Goldman Sachs - Singapore
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- Indo Tambangraya Megah - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Merrill Lynch Commodities Europe
- Planning Commission, India
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