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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, 05 March 15
INDIA WILL BE THE LARGEST DRIVER OF GLOBAL SEABORNE COKING COAL DEMAND GROWTH IN 2015 - WOOD MACKENZIE
Global demand growth will remain weak because of China’s negative demand growth.
COALspot.com: At Coaltrans India, Wood Mackenzie says I ...
Thursday, 05 March 15
BUKIT ASAM BOOKED US$ 1 BILLION REVENUE IN 2014
COALspot.com: Indonesian publicly listed and state owned coal miner PT. Bukit Asam, has announced that, the revenue of the company for the period J ...
Wednesday, 04 March 15
AN AGENDA FOR CHANGE - FITCH INDONESIA CONFERENCE
Fitch Indonesia Conference - 5 March 2015
Fitch Ratings will host its annual Indonesia conference on 5 March 2015.
The theme of this year ...
Wednesday, 04 March 15
KEEP CALM AND INVEST IN DRY - THEODORE NTALAKOS
Keep Calm and Carry On was originally a motivational poster, intended to raise the morale of the British public, produced by the British government ...
Tuesday, 03 March 15
INDONESIAN COAL EXPORT VOLUME TO DECLINE 50% BY 2019
COALspot.com: The Indonesian government is planning to reduce coal export volume by 50% within the next five years while keeping its coal productio ...
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- Indian Oil Corporation Limited
- White Energy Company Limited
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Australian Coal Association
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- The Treasury - Australian Government
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Tamil Nadu electricity Board
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Planning Commission, India
- India Bulls Power Limited - India
- Mercator Lines Limited - India
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Jaiprakash Power Ventures ltd
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rio Tinto Coal - Australia
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Marubeni Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- Jorong Barutama Greston.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- The University of Queensland
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Altura Mining Limited, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
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