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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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Sunday, 18 April 21
INDONESIA LIKELY TO WITNESS 119 OIL AND GAS PROJECTS STARTS ACROSS VALUE CHAIN BY 2025, SAYS GLOBALDATA
Indonesia is expected to witness 119 oil and gas projects commencing their operations across value chain during 2021-2025, accounting for 6% of the ...
Sunday, 18 April 21
WORLDSTEEL RAISES 2021 STEEL DEMAND GROWTH FORECAST TO 5.8% - WORLDSTEEL
The World Steel Association (worldsteel) today released its Short Range Outlook (SRO) for 2021 and 2022. worldsteel forecasts that steel demand wil ...
Sunday, 18 April 21
CHINA'S Q1 COAL OUTPUT RISES 16% ON STRONG DEMAND FOR WINTER HEATING - REUTERS
China’s coal output rose 16% in the first quarter from the same period last year, bolstered by strong demand for winter heating and robust in ...
Wednesday, 14 April 21
INDIA HAS A RECORD LEVEL OF STOCKPILED COAL DAMPENING NEED FOR NEW DOMESTIC MINES - IEEFA
Proposed coal mining expansions at odds with excess supply
India has stockpiled a record 132 million tonnes of coal – enough t ...
Wednesday, 14 April 21
BANGLADESH NEEDS A RENEWABLES FOCUS, NOT A SWITCH FROM 'COAL TO GAS' - IEEFA
Renewables are cheaper and more sustainable than gas imports, and can provide better energy security in developing nations
The emerg ...
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- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- Renaissance Capital - South Africa
- India Bulls Power Limited - India
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Sree Jayajothi Cements Limited - India
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- The University of Queensland
- Malabar Cements Ltd - India
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Java Power - Indonesia
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Tata Chemicals Ltd - India
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Bharathi Cement Corporation - India
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Australian Coal Association
- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Planning Commission, India
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
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