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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, 22 January 19
9TH GLOBAL MANUFACTURING SUPPLY CHAIN INNOVATION SUMMIT 2019
Rethinking the supply chain in manufacturing is a must at the digital era along with the industry transforming and innovating; new manufacturing is ...
Tuesday, 22 January 19
AUSTRALIA'S YANCOAL PRODUCED 50 MMT SALEABLE COAL IN 2018 UP 59 PER CENT ON THE YEAR PRIOR, THE QUARTERLY REPORT SHOWS
According to the report, the miner's quarterly (Q4' 18) saleable coal production of 12.4 Mmt. Includes 10.5 Mmt (85 per cent) from the Comp ...
Monday, 21 January 19
KOSPO INVITING BIDS FOR 320K MT OF LOW CALORIFIC VALUE COAL
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 3,800 kcal/kg NCV low calo ...
Monday, 21 January 19
SUPRAMAX: INDONESIAN COAL RUNS, TONNAGE WAS GIVING APS DELIVERIES AND A 57,000DWT SHIP FIXED AT $7,000 FOR A TRIP TO WEST COAST INDIA - BALTIC BRIEFING
Capesize
A positive end to a week that saw rates on the West Australia/China run slip below $6.00, as charterers faced a plentiful supply ...
Monday, 21 January 19
HARD COAL WORLD TRADE IN 2018 RISES BY 3.7 PER CENT; GLOBAL HARD COAL PRODUCTION INCREASES BY 1.7 PER CENT - VDKI
Global Hard Coal Production Increases By 1.7%.
According to provisional calculations by the German Coal Importer Association (VDKi), ...
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- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Siam City Cement - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Aditya Birla Group - India
- MS Steel International - UAE
- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- London Commodity Brokers - England
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Romanian Commodities Exchange
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- The University of Queensland
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
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