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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, 28 September 21
THE MAIDEN EDITION OF DIVE TECHNOLOGY SUMMIT 2021 CONCLUDES SUCCESSFULLY
Press Release: DIVE TECHNOLOGY SUMMIT 2021, a one-day conference on the recent technological advancements in the Industrial Diving industry conclud ...
Monday, 27 September 21
CHINESE COAL FIRMS MEET TO ADDRESS WINTER SUPPLY CHALLENGES - CNBC
Major Chinese coal producers are trying to resolve supply shortages and curb price rises as the country’s winter consumption peak approaches, ...
Saturday, 25 September 21
HIGH STAKES FOR ASIAN DEVELOPMENT BANK’S AMBITIOUS COAL POWER RETIREMENT PLAN - IEEFA
Implementation challenges could block funding for other equally important high impact clean energy funding strategies
In the lead up ...
Thursday, 23 September 21
LONGER COAL CONTRACTS MAY REIN IN PRICES - ECNS
In China’s coal sector that has been marred recently by price surges, regional authorities and related enterprises should ensure the fuel con ...
Thursday, 23 September 21
BALTIC INDEX HITS 12-YEAR PEAK ON FIRMER VESSELS RATES - REUTERS
The Baltic Exchange’s main dry bulk sea freight index rose for a fourth straight session on Wednesday to a 12-year high, buoyed by higher rat ...
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- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Eastern Coal Council - USA
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Standard Chartered Bank - UAE
- CNBM International Corporation - China
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Goldman Sachs - Singapore
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Australian Coal Association
- India Bulls Power Limited - India
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Aditya Birla Group - India
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