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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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Wednesday, 26 May 21
NEW POWER AND ENERGY MASTER PLAN MUST BE DESIGNED IN BANGLADESH'S BEST INTERESTS, NOT JAPAN'S - IEEFA
JICA must deliver a low or zero emissions plan as promised, not fund Matarbari 2 coal plant
Clear understandings from the Bangladesh ...
Tuesday, 25 May 21
KOREA SOUTHERN POWER INVITED BIDS FOR 870,000 MT OF MIN 5300 NCV COAL FOR 2021 TO 2023.
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for total 870,000 MT of Min 5,300 kcal/kg NCV coal for Augu ...
Tuesday, 25 May 21
CHINA’S COAL OUTPUT RISES IN FIRST FOUR MONTHS - XINHUA
China’s raw coal output rose 11.1 percent year on year to 1.29 billion tonnes in the first four months of 2021, official data showed.
&nb ...
Tuesday, 25 May 21
MARINE SHIPPERS BULK UP: ANOTHER GAME OF CHICKEN IN THE WORKS? - THE KOREA TIMES
Global shipping companies have been placing orders for large ships, with many anticipating further increased competition within the next three year ...
Friday, 21 May 21
MARKET INSIGHT - INTERMODAL
The dry bulk market’s counter seasonal surge so far into the first half of the year -in a sort of 2010 manner - and Capesize’s recent r ...
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- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Port Waratah Coal Services - Australia
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- The University of Queensland
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Directorate Of Revenue Intelligence - India
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- Aditya Birla Group - India
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
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