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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 September 22
INDONESIA COAL PRICE REFERENCE SLIPS SLIGHTLY IN SEPTEMBER 2022
COALspot.com: Indonesian Coal Price Reference for September delivery drops 0.74 per cent month on month.
The Indonesian Coal Price R ...
Friday, 02 September 22
ABM INVESTAMA BUYS 30% GEMS SHARES FOR US$ 420 MILLION
PT ABM Investama Tbk through its indirect subsidiary, bought a 30% stake in the PT Golden Energy Mines Tbk for US$ 420 million or around Rp 6.2 tri ...
Wednesday, 31 August 22
MARKET INSIGHT - INTERMODAL
Scorching temperatures and extremely dry conditions during the Northern hemisphere summer have been drying crops. Yield prospects have subsided in ...
Tuesday, 23 August 22
HIGH COAL PRICES COULD BOOST INDONESIA'S ENERGY TRANSITION - IEEFA
Global coal prices have reached an all-time high as countries stop purchasing Russian coal amidst the Russia-Ukraine conflict. Indonesian coal comp ...
Tuesday, 23 August 22
A COMBINED US$6.8-BILLION CASH BALANCE OF INDONESIAN COAL COMPANIES COULD PROVIDE FOR TIMELY INVESTMENTS IN GREEN TRANSITION - IEEFA
A combined US$6.8-billion cash balance of Indonesian coal companies could provide for timely investments in green transition
The opp ...
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- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- SMC Global Power, Philippines
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- The University of Queensland
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petron Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- VISA Power Limited - India
- Posco Energy - South Korea
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Anglo American - United Kingdom
- Sical Logistics Limited - India
- Interocean Group of Companies - India
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Kartika Selabumi Mining - Indonesia
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Latin American Coal - Colombia
- Uttam Galva Steels Limited - India
- Sakthi Sugars Limited - India
- Planning Commission, India
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Parliament of New Zealand
- Aditya Birla Group - India
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Sinarmas Energy and Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
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