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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, 01 December 23
COAL MINERS GROUP EXPECTS INDONESIA’S 2023 COAL OUTPUT TO SURPASS TARGET - REUTERS
The Indonesian Coal Mining Association (ICMA) expects the country’s 2023 coal output to surpass the official target of 695 million metric ton ...
Friday, 24 November 23
COAL IMPORTS TO INDIA IN OCTOBER 2023 REACHED HIGHEST LEVELS IN NEARLY A YEAR AND A HALF - VESSELSVALUE, VESON NAUTICAL
In October, coal imports to India reached 13.8 mt in October 2023, according to Oceanbolt, a Veson Nautical solution, the highest level since May 2 ...
Friday, 24 November 23
COAL SHIPMENTS TO ADVANCED ECONOMIES DOWN 17% SO FAR IN 2023 - BIMCO
In the first ten months of 2023, coal shipments to advanced economies fell by 17% y/y, as demand for electricity declined and the share of electric ...
Friday, 24 November 23
INTELLIGENT COAL MINES CONTRIBUTE TO IMPROVING SAFETY STANDARDS - CHINA DAILY
Mechanization, automation and intelligent upgrades have contributed to improved safety in coal mines, though the level of development of intelligen ...
Friday, 24 November 23
WHY AUSTRALIA'S COAL MINES ARE GETTING BIGGER - IEEFA
Australia’s largest coal mines are getting larger. Mines in New South Wales (NSW) are ramping up production following the state’s recov ...
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- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Thiess Contractors Indonesia
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Economic Council, Georgia
- The University of Queensland
- Makarim & Taira - Indonesia
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Commonwealth Bank - Australia
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Pendopo Energi Batubara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Sical Logistics Limited - India
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Agrawal Coal Company - India
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- ASAPP Information Group - India
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
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