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