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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, 01 July 21
WHY INDIA’S SOLAR POWER TARIFFS ARE CLIMBING AFTER HITTING RECORD LOWS LAST YEAR - IEEFA
What’s behind the recent increase?
Solar tariffs are deflationary. Prices have fallen by 75% in seven years in India, and in 2 ...
Thursday, 01 July 21
END TO COAL POWER BROUGHT FORWARD TO OCTOBER 2024
Press Release: The deadline to phase out coal from Great Britain's energy system has been brought forward by a whole year, highlighting the UK& ...
Thursday, 01 July 21
WHY BUILD 600 NEW UNPROFITABLE COAL PLANTS? - DEUTSCHE WELLE
Governments in Asia are planning 600 new coal plants that could lose investors $150 billion and derail efforts to limit temperature rise in line wi ...
Thursday, 01 July 21
FIVE ASIAN COUNTRIES ACCOUNT FOR 80% OF NEW COAL POWER INVESTMENT - THE GUARDIAN
Five Asian countries are jeopardising global climate ambitions by investing in 80% of the world’s planned new coal plants, according to a rep ...
Wednesday, 30 June 21
DELTA DUNIA MAKMUR RECORDED AN IMPROVED REVENUE IN Q1 2021; REVENUE INCREASED BY 49% QOQ TO US$160 MILLION ON THE BACK OF COAL PRICE RECOVERY
PT Delta Dunia Makmur Tbk. (“DOID”) released its consolidated financial and operating results that include its primary and wholly-owned ...
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- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- PetroVietnam Power Coal Import and Supply Company
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Siam City Cement - Thailand
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- Coal and Oil Company - UAE
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- Australian Coal Association
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
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