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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, 14 August 17
THE FREIGHT MARKET CONTINUES ON AN UPWARD PATH
COALspot.com: The freight market was continued to rose this past week compared to the previous week, as BDI, Cape and Panamax indexes show a positi ...
Monday, 14 August 17
IN A PARIS AGREEMENT WORLD, COAL WILL MEET GROWING ASIAN ENERGY NEEDS - BENJAMIN SPORTON
When providing 41% of the world’s electricity, 85% of global cement, 74% of the world’s steel and 60% of the world’s aluminum, co ...
Friday, 11 August 17
KOMIPO INVITES COAL BIDS FOR BORYEONG POWER PLANT
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued an another new tender for total 1,280,000 Metric Tons of Bitumino ...
Friday, 11 August 17
U.S WEEKLY COAL OUTPUT ALMOST FLAT WEEK OVER WEEK, EIA SAYS
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 16.1 million short tonn ...
Thursday, 10 August 17
GLOBAL COAL PRODUCTION FELL SIGNIFICANTLY IN 2016 - IEA
COALspot.com: Global coal production fell significantly in 2016, while global trade in natural gas was up. These are two of the key messages in Wor ...
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- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- Antam Resourcindo - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Krishnapatnam Port Company Ltd. - India
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Planning Commission, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Karaikal Port Pvt Ltd - India
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- Minerals Council of Australia
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- CNBM International Corporation - China
- PTC India Limited - India
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
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