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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, 19 July 22
SEEING RED? - WOOD MACKENZIE
What a Republican mid-term victory could mean for US energy and climate policy
According to current polling the Republican Party has ...
Thursday, 14 July 22
INDIA'S COAL IMPORTS HIT RECORD HIGH IN JUNE - REUTERS
India's coal imports hit a record high in June despite high global prices, data from three trade sources and Refinitiv ship tracking showed, as ...
Thursday, 14 July 22
CHINA'S JUNE COAL IMPORTS SLUMP AS TRADERS SHUN EXPENSIVE OVERSEAS CARGOES - REUTERS
China’s coal imports fell 33% in June from a year ago, with traders turning down expensive overseas cargoes in favor of domestic ones with ca ...
Wednesday, 13 July 22
KOWEPO TO IMPORT 2.79 MILLION TONS OF LOW TO MEDIUM COAL
COALspot.com: Korea Western Power Co., Ltd. (KOWEPO) has issued an International tender for Total 1360k MT of Min.4400 kcal/kg NCV coal and Total 1 ...
Wednesday, 13 July 22
HAVE MINERS MISSED THE BOAT TO INVEST AND GET AHEAD OF THE ENERGY TRANSITION? - WOOD MACKENZIE
Miners are in rude health, benefiting from economic stimuli, the post-pandemic recovery and associated supply constraints. Initially the Ukraine wa ...
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- Indian Energy Exchange, India
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Coal Association
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Tamil Nadu electricity Board
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Malabar Cements Ltd - India
- Planning Commission, India
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Indonesian Coal Mining Association
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
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