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