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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
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Thursday, 01 July 21
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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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- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Parliament of New Zealand
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- The University of Queensland
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Parry Sugars Refinery, India
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Commonwealth Bank - Australia
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Oldendorff Carriers - Singapore
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Planning Commission, India
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- White Energy Company Limited
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