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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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Thursday, 26 March 15
KYUSHU ELECTRIC POWER OF JAPAN HAS JOINED GLOBALCOAL ONLINE COAL TRADING PLATFORM
globalCOAL® announced today that Kyushu Electric Power, one of Japan’s largest utility companies, has joined its online coal trading plat ...
Wednesday, 25 March 15
MARKET INSIGHT: TANKER CHARTERING - KATERINA RESTIS
The 1st of January 2015, as broadly reported, denoted the beginning date of new and progressive emission regulations for vessels operating within t ...
Wednesday, 25 March 15
AUSTRALIA SET TO ONCE AGAIN BE THE WORLD'S LARGEST COAL EXPORTER - COAL, MINERALS COUNCIL OF AUSTRALIA
Greg Evans, Executive Director - Coal, Minerals Council of Australia
Media Release: The latest Resources and Energy Quarterly published by the ...
Wednesday, 25 March 15
AUSTRALIA UPSTREAM ENERGY FIRMS FACE RISING OIL PRICE EXPOSURE - FITCH
Fitch Ratings says the Australian oil and gas companies involved in exploration and production face higher exposure to oil price-linked revenues, w ...
Wednesday, 25 March 15
2014 : UK COAL IMPORTS DECLINED 17%; GERMANY COAL IMPORTS UP 6%
Hard Coal Market 2014: Despite The Energy Turnaround, Hard Coal Imports To Germany Rise By More Than 6%, Although Hard Coal-Fired Power Generation ...
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- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Miang Besar Coal Terminal - Indonesia
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- Central Electricity Authority - India
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- San Jose City I Power Corp, Philippines
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Kohat Cement Company Ltd. - Pakistan
- The State Trading Corporation of India Ltd
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- Meenaskhi Energy Private Limited - India
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Ministry of Mines - Canada
- Parliament of New Zealand
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- New Zealand Coal & Carbon
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Mjunction Services Limited - India
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- GMR Energy Limited - India
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- PTC India Limited - India
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Chamber of Mines of South Africa
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Petron Corporation, Philippines
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
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