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