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