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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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Friday, 02 December 22
INDONESIAN COAL PRICE REFERENCE PLUNGE TOWARD US$ 281.48 A TON AS DEMAND DROPS WORLDWIDE
COALspot.com: The cost of coal is falling so fast that it is beginning to put real money back in the pockets of end-users.
Indonesia ...
Wednesday, 30 November 22
INDONESIA’S BUMI RESOURCES TARGETS 2023 COAL OUTPUT OF 80 MLN TONNES - REUTERS
Indonesian coal miner PT Bumi Resources Tbk BUMI.JKis eyeing a 10% increase in output to 80 million tonnes next year amid expectations for more fav ...
Wednesday, 30 November 22
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Tuesday, 29 November 22
INDIA TO RECEIVE FIRST LNG CARGO FROM INDONESIA’S TANGGUH LNG - REUTERS
India will receive its first cargo from Indonesia’s Tangguh liquefied natural gas (LNG) plant at the Dahej terminal on Monday, according to a ...
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- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Economic Council, Georgia
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Vedanta Resources Plc - India
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- Therma Luzon, Inc, Philippines
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Chettinad Cement Corporation Ltd - India
- Sree Jayajothi Cements Limited - India
- Central Java Power - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Binh Thuan Hamico - Vietnam
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- CNBM International Corporation - China
- Australian Coal Association
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Parliament of New Zealand
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
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