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