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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, 08 May 21
LNG-TO-POWER INVESTORS IN THE PHILIPPINES RISK EXPOSURE TO $14 BILLION IN STRANDED ASSETS - IEEFA
High regulatory and financial uncertainty in the Philippines market
The race to develop liquified natural gas (LNG) facilities in th ...
Saturday, 08 May 21
THE COAL-TO-RENEWABLES TRANSITION TAKES OFF - IEEFA
Pre-Biden changes underscore coming 10-year wave of coal plant retirements
The traditional S-curve growth exhibited by disruptive te ...
Friday, 07 May 21
CHINA'S TOTAL COAL IMPORTS FOR 2020 REACHED A VOLUME OF 304 MILLION TONS - ASSOCARBONI
Our benchmarks, manufacturing Countries like China, Germany, Japan, India, South Korea and Taiwan will continue to use a mix of coal and nuclear to ...
Friday, 07 May 21
SEABORNE WORLD COAL TRADE CLOSED 2020 IN NEGATIVE - ASSOCARBONI
Coal confirmed its leadership as leading fuel for electricity generation also in 2020, accounting for 38% of overall production. For the first time ...
Friday, 07 May 21
INDONESIA'S THERMAL COAL EXPORTS IN 2020 DECREASED BY 13%; INDIA REMAINED THE TOP DESTINATION FOR INDONESIAN COAL - ASSOCARBONI
An increase in seaborne trade is forecast for 2022, driven by markets in Southeast Asia, where growing demand for coal from Bangladesh, the Philipp ...
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- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- Tata Chemicals Ltd - India
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Sojitz Corporation - Japan
- Maharashtra Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- VISA Power Limited - India
- Mercator Lines Limited - India
- Makarim & Taira - Indonesia
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- Power Finance Corporation Ltd., India
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Australian Coal Association
- Planning Commission, India
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Borneo Indobara - Indonesia
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Indian Oil Corporation Limited
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- SMC Global Power, Philippines
- Star Paper Mills Limited - India
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Trasteel International SA, Italy
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- White Energy Company Limited
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
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