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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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Wednesday, 10 August 16
THE INDONESIAN DRAFT NEW MINING LAW - AMENDMENTS TO THE 2009 MINING LAW
KNOWLEDGE TO ELEVATE
COALspot.com: A draft mining law published by Indonesia's Minister of Energy and Mineral Resources provides use ...
Tuesday, 09 August 16
CS50 COAL INDEX HITS NEW FIFTY-WEEKS HIGH
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 1.78% week over week to averaging $41.85 per ton this past week, shows CS (i) C ...
Tuesday, 09 August 16
HARD COAL PRODUCTION AND WORLD TRADE ON THE DECLINE FOR THE FIRST TIME IN YEARS - VDKI
Hard coal production and world trade on the decline for the first time in years – not a harbinger of a global energy turnaround
Worldwid ...
Tuesday, 09 August 16
BREXIT, BRITANNIA AND THE WAVES - TREVOR CROWE, CLARKSON RESEARCH
This week, the Bank of England put into place its action plan following the UK referendum on 23rd June, which indicated the British population&rsqu ...
Monday, 08 August 16
INDONESIA'S DRAFT MINING LAW HINTS AT FUTURE REGULATORY FRAMEWORK
KNOWLEDGE TO ELEVATE
COALspot.com: A draft mining law published by Indonesia's Minister of Energy and Mineral Resources provides use ...
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- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Planning Commission, India
- Xindia Steels Limited - India
- White Energy Company Limited
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Videocon Industries ltd - India
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- The University of Queensland
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- Bangladesh Power Developement Board
- Interocean Group of Companies - India
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Petron Corporation, Philippines
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Deloitte Consulting - India
- Cement Manufacturers Association - India
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Standard Chartered Bank - UAE
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Posco Energy - South Korea
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
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