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