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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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Friday, 29 January 21
COAL EXPORTS FROM AUSTRALIA TO MAINLAND CHINA DECLINED BY -22.2% Y-O-Y IN 2020 - BANCHERO COSTA
In the 12 months of 2020, global seaborne coal trade declined by as much as -12.7% year-on-year, according to vessel tracking data from Refinitiv, ...
Friday, 29 January 21
OPEC+, COVID-19 AND ENERGY TRANSITION - 3 THEMES IMPACTING OIL MARKETS AND REFINING IN 2021 - WOOD MACKENZIE
Wood Mackenzie’s latest outlook report shows that the art of balancing oil markets and the refining sector in 2021 hinges upon three key them ...
Thursday, 28 January 21
STRONG CHINESE THERMAL COAL IMPORTS TO BENEFIT INDONESIAN MINERS IN THE NEAR TERM - FITCH RATINGS
China's thermal coal imports are likely to remain strong ahead of the Chinese New Year in mid-February on robust demand, high utilisation at do ...
Thursday, 28 January 21
WIND PROPULSION FOR DRY BULK CARRIERS - OLDENDORFF
Oldendorff Carriers (OC) has signed a Joint Development Project (JDP) with Anemoi Marine Technologies (Anemoi), Lloyd’s Register (LR) and Sha ...
Thursday, 28 January 21
BUMA PRICED A USD400 MILLION 7.75% 5-YEAR SENIOR NOTES
PT Delta Dunia Makmur Tbk. announced that its subsidiary, PT Bukit Makmur Mandiri Utama priced a USD400 million 5-year (non-callable 2-year)& ...
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- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Grasim Industreis Ltd - India
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- VISA Power Limited - India
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- Parliament of New Zealand
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- New Zealand Coal & Carbon
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- TeaM Sual Corporation - Philippines
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Borneo Indobara - Indonesia
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Ambuja Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- Bhushan Steel Limited - India
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
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