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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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Tuesday, 26 July 22
CAP RUSSIA'S OIL PRICE NOW - PROJECT SYNDICATE
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Tuesday, 26 July 22
WILL SOUTH AMERICA’S WINTER DEMAND DRAW LNG CARGOES AWAY FROM EUROPE? - ICIS
South America is now in the middle of its winter demand season. Last year the region increased its share of global LNG imports in winter, with Braz ...
Monday, 25 July 22
GLOBAL 2021 COAL-FIRED ELECTRICITY GENERATION SURGES TO RECORD HIGH - REUTERS
By contrast, mine output was still fractionally below the record set between 2012 and 2014 because older and less efficient coal generators have be ...
Saturday, 23 July 22
THE EU HAS BEEN REDUCING IMPORTS OF RUSSIAN REFINED OIL PRODUCTS SINCE MARCH - BANCHERO COSTA
The European Union could now ban the import and transit of fuel oil from Russia around six months ahead of the planned deadline, an EU official and ...
Saturday, 23 July 22
INDONESIA CONSIDERING SCRAPPING DOMESTIC SALES RULE FOR PALM OIL EXPORTS - REUTERS
Indonesia is considering removing a domestic sales requirement for palm oil exports because high inventories of the vegetable oil have been holding ...
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- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- New Zealand Coal & Carbon
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercator Lines Limited - India
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Planning Commission, India
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- PTC India Limited - India
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- Antam Resourcindo - Indonesia
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- White Energy Company Limited
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
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