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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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Sunday, 21 August 22
COAL-RICH POLAND FACES WINTER OF ENERGY DISCONTENT - DW
Poland uses 10 million tons of coal a year to heat households — a whopping 87% of all coal consumed in EU homes in 2019, according to the War ...
Saturday, 20 August 22
KOSPO TO IMPORT 240000 MT OF MIN 4400 KCAL/KG NCV STEAM COAL FOR OCTOBER;LOADING FROM RUSSIAN PORTS NOT ALLOWED
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 240,000 MT of min 4,400kcal/kg to max. 4,999 kcal/kg NC ...
Wednesday, 17 August 22
INDIAN COMPANIES SWAPPING DOLLAR FOR ASIAN CURRENCIES TO BUY RUSSIAN COAL - REUTERS
Indian companies are using Asian currencies more often to pay for Russian coal imports, according to customs documents and industry sources, avoidi ...
Wednesday, 17 August 22
LNG: MAJOR INVESTMENT AND EXPANSION PHASE, DOUBLING OF LIQUEFACTION CAPACITY BY 2028 PROJECTED - CLARKSONS
Clarksons Research have released the latest version of their long standing annual review, LNG Trade & Transport, on to Shipping Intelligence Ne ...
Wednesday, 17 August 22
UNAFFORDABLE LNG PRICES UNDERMINE RAPID DEMAND GROWTH FORECASTS IN KEY ASIAN MARKETS - IEEFA
Sustained high prices may accelerate downward pressures on Asian LNG demand, clouding long-term industry outlooks
The global liquefi ...
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- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- GMR Energy Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Economic Council, Georgia
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- Parliament of New Zealand
- VISA Power Limited - India
- Wilmar Investment Holdings
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Sical Logistics Limited - India
- Parry Sugars Refinery, India
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- McConnell Dowell - Australia
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Mintek Dendrill Indonesia
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- The University of Queensland
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Altura Mining Limited, Indonesia
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Aditya Birla Group - India
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
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