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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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Monday, 04 July 22
INDONESIAN COAL PRICE REFERENCE SLIGHTLY DOWN IN JULY
COALspot.com: Indonesian Coal Price Reference for July delivery drops 1.52 per cent month on month.
The Indonesian Coal Price Refere ...
Sunday, 03 July 22
CHINESE VICE PREMIER STRESSES CLEAN, EFFICIENT USE OF COAL - XINHUA
Chinese Vice Premier Han Zheng has stressed efforts to promote the clean and efficient use of coal, and pursue green, low-carbon and high-quality d ...
Sunday, 03 July 22
SOVEREIGN SECTOR OUTLOOK REVISED TO NEUTRAL ON UKRAINE WAR IMPACT - FITCH RATINGS
The deterioration in global sovereign credit conditions this year relative to our expectations at end-2021 has caused Fitch Ratings to change its g ...
Saturday, 02 July 22
GLOBAL SEABORNE COAL EXPORTS IN 2021 INCREASED BY 4.4% Y-O-Y TO 1147 MLN TONNES - BANCHERO COSTA
In the full 12 months of 2021, global seaborne coal exports increased by +4.4% y-o-y to 1147 mln tonnes, from 1099 mln tonnes in 2020, according to ...
Friday, 01 July 22
INDIA'S TOP CEMENT MAKER PAYING FOR RUSSIAN COAL IN CHINESE YUAN - REUTERS
India’s biggest cement producer, UltraTech Cement ULTC.NS, is importing a cargo of Russian coal and paying using Chinese yuan, according to a ...
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- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Parry Sugars Refinery, India
- Planning Commission, India
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- SMG Consultants - Indonesia
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Australian Coal Association
- Antam Resourcindo - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Deloitte Consulting - India
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- ASAPP Information Group - India
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Minerals Council of Australia
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- White Energy Company Limited
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
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