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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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- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- Deloitte Consulting - India
- Indonesian Coal Mining Association
- Wilmar Investment Holdings
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
- Electricity Authority, New Zealand
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Minerals Council of Australia
- Vedanta Resources Plc - India
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Marubeni Corporation - India
- CNBM International Corporation - China
- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Transport, Egypt
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Posco Energy - South Korea
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Planning Commission, India
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Aditya Birla Group - India
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- The State Trading Corporation of India Ltd
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
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