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