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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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Thursday, 08 March 18
AVERAGE U.S. COAL MINING PRODUCTIVITY INCREASES AS PRODUCTION FALLS - EIA
Coal mining productivity in the United States increased 26% over the past five years, reaching 6.8 tons per miner hour in 2017, up from 5.4 tons pe ...
Wednesday, 07 March 18
WHEN AN IRRESISTIBLE FORCE MEETS AN IMMOVABLE OBJECT - GARD
KNOWLEDGE TO ELEVATE
Negotiable bills of lading are fundamental to trade. As documents of title, they are essential to the sale and carriage o ...
Wednesday, 07 March 18
SHIPPING MARKET INSIGHT - GIANNIS ANDRITSOPOULOS
The comparably small upside Handysize asset values have noted compared to other sizes since the historical lows of the dry bulk market in combinati ...
Tuesday, 06 March 18
FOREIGN INVESTORS ALLOWED TO BID FOR BIG MINING CONCESSIONS - THE JAKARTA POST
The government has allowed foreign investors to bid for mining concessions with a total area of more than 500 hectares, while smaller areas will be ...
Tuesday, 06 March 18
LNG VESSELS HAVE EMERGED AS THE FASTEST GROWING SEGMENT FOR THE WATERWAY - GERRY LATHROP
The day was July 25th 2016, a partly cloudy day on the Panama canal, and to most people a rather innocuous day without any real merit, however in s ...
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- Bayan Resources Tbk. - Indonesia
- Malabar Cements Ltd - India
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Aditya Birla Group - India
- Directorate General of MIneral and Coal - Indonesia
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Australian Coal Association
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Sarangani Energy Corporation, Philippines
- The State Trading Corporation of India Ltd
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- Commonwealth Bank - Australia
- Aboitiz Power Corporation - Philippines
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- SN Aboitiz Power Inc, Philippines
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
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