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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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Saturday, 05 June 21
IT'S TIME FOR THE BIDEN ADMINISTRATION TO CHAMPION RENEWABLE ENERGY IN THE PHILIPPINES, NOT NUCLEAR OR FOSSIL GAS - IEEFA
Fossil gas and nuclear investments risk locking in costly, outdated infrastructure for the long-term
The United States has spent the ...
Friday, 04 June 21
NEW COAL-FIRED POWER PLANTS IN INDIA WILL BE ECONOMICALLY UNVIABLE - IEEFA
Coal capacity additions face major stranded asset risk
Much of India’s 33 gigawatts (GW) of coal-fired power capacity currently under co ...
Thursday, 03 June 21
JUNE HBA IS HITTING ABOVE $100 AND SETTLED AT ITS HIGHEST SINCE OCTOBER 2020
COALspot.com: The Indonesia coal price reference for June 2021 settles at US$ 100.33 per ton FOB vessel.
The Indonesia coal pr ...
Wednesday, 02 June 21
INDONESIA RV WAS DOWN TO LOW/MID $20,000S DAY FOR PANAMAX/KAMSARMAX WITH DELIVERY S CHINA - BANCHERO COSTA
Panamax
A softening week in the Pacific basin with rates under a downward pressure mainly caused by the oversupply of tonnage in the area, said ...
Wednesday, 02 June 21
EUROPEAN UNION'S IRON ORE IMPORTS - BANCHERO COSTA
The European Union (27) is currently the fourth largest importer of iron ore in the world, after China, Japan, and South Korea.
Euro ...
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- MS Steel International - UAE
- Australian Coal Association
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
- Ministry of Finance - Indonesia
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- London Commodity Brokers - England
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Parry Sugars Refinery, India
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Georgia Ports Authority, United States
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- IEA Clean Coal Centre - UK
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- The University of Queensland
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- Dalmia Cement Bharat India
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Thai Mozambique Logistica
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
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