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