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