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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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Monday, 17 September 18
GLENCORE RETURNS TO JAPAN COAL TALKS SCUPPERED BY HIGH PRICES - BLOOMBERG
Mining giant Glencore Plc and Japanese utilities have resumed thermal coal supply negotiations, restarting talks that fell apart earlier this year ...
Monday, 17 September 18
SMALL PERCENTAGE OF THE WORLD FLEET WILL FIT SCRUBBERS - FORECASTS : METTE KRONHOLM FRAENDE
In recent months, there have been numerous reports of a strong pick-up in demand for scrubbers. On 1 January 2020, however, the number of ships fit ...
Saturday, 15 September 18
POWERING SUSTAINABLE DEVELOPMENT WITH LOW EMISSION COAL TECHNOLOGIES - WCA
In its 5th Strategic Energy Plan this year (2018), the Japanese Cabinet recognised coal as an important energy resource, necessary for the country& ...
Friday, 14 September 18
10 YEARS ON FROM LEHMAN, HOW IS SHIPPING'S "HANGOVER"? - CLARKSONS RESEARCH
On 15th September 2008, the collapse of Lehman Brothers crystallised the financial crisis and the onset the worst economic downturn for a century. ...
Thursday, 13 September 18
OPEC SEES SLOWER 2019 OIL DEMAND GROWTH, WARNS ON ECONOMY
Crude Oil Price Movements
In August, the OPEC Reference Basket declined by $1.01 m-o-m, settling at $72.26/b. Crude oil futures were also down ...
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- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Mintek Dendrill Indonesia
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Thiess Contractors Indonesia
- Africa Commodities Group - South Africa
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- Medco Energi Mining Internasional
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Indonesian Coal Mining Association
- ASAPP Information Group - India
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Kartika Selabumi Mining - Indonesia
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Orica Australia Pty. Ltd.
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- GMR Energy Limited - India
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