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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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Wednesday, 30 May 18
HIGH PRICE, DMO ENCOURAGE COAL MINERS TO BOOST PRODUCTION - THE JAKARTA POST
A number of coal miners are planning to increase production by 10 percent in the second half of this year after a worldwide price increase.
Th ...
Wednesday, 30 May 18
SHIPPING MARKET INSIGHT - ILIAS M. LALAOUNIS
Among several hot topics that will be discussed during the Posidonia week, the International Maritime Organization regulation that will be enforced ...
Tuesday, 29 May 18
BLOCKCHAIN CAN HAVE A TRANSFORMATIVE EFFECT ON THE SHIPPING INDUSTRY
KNOWLEDGE TO ELEVATE
Following the launch of a legal briefing on blockchain contracts from UK P&I Club, Claims Executive, Filip Koscieleck ...
Tuesday, 29 May 18
INDIA'S COAL IMPORT DECLINES IN APRIL AMID DIVERSION TO THERMAL POWER PLANTS - PTI
India’s coal import fell by 9 percent to 17.32 million tonnes (MT) in April on the back of ample supply of dry fuel from domestic sources.
...
Monday, 28 May 18
COAL SUPPLY DIVERSION IRKS INDUSTRIES DEPENDENT ON CAPTIVE POWER PLANTS - HINDU BUSINESS LINE
The government’s move to prioritise coal supplies to power plants with minimal coal stock has disrupted fuel supply to some sectors, which ha ...
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- Coal and Oil Company - UAE
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- The State Trading Corporation of India Ltd
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sojitz Corporation - Japan
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- Chamber of Mines of South Africa
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Salva Resources Pvt Ltd - India
- Meralco Power Generation, Philippines
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- Videocon Industries ltd - India
- The University of Queensland
- ICICI Bank Limited - India
- Malabar Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Marubeni Corporation - India
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Aditya Birla Group - India
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