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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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Monday, 14 December 20
PHILIPPINE BANK RCBC TO STOP LENDING FOR NEW COAL-FIRED POWER PROJECTS - MANILA BULLETIN
Yuchengco-led Rizal Commercial Banking Corporation (RCBC) has forthrightly declared that it will no longer extend financing to new coal-fired power ...
Sunday, 13 December 20
LONGSTANDING DOWNSIDE RISKS TO TRADE OUTLOOK - BALTIC EXCHANGE
The OECD has attempted to put a positive spin on the trade message emanating from its latest economic outlook, released last week.
The ...
Sunday, 13 December 20
INDONESIA COAL OUTPUT AT 514 MILLION TONNES THIS YEAR, 2021 TARGET UNCHANGED - REUTERS
Indonesia coal output in the period to Dec. 10 stood at 514.2 million tonnes, official data from the energy ministry’s website showed.
&n ...
Thursday, 10 December 20
MALAYSIA'S CIMB ANNOUNCES COAL FINANCING PHASE-OUT BY 2040 AS ASIA'S FOSSIL FUEL DIVESTMENT DRIVE ACCELERATES - IEEFA
The first emerging markets bank to announce a progressive coal exit policy
Malaysia’s CIMB Group Holdings (CIMB) has announced ...
Wednesday, 09 December 20
MARKET INSIGHT - INTERMODAL
Heading towards the end of a difficult year and with the entire planet under the shadow of the covid-19 virus, it is interesting to proceed with a ...
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- Attock Cement Pakistan Limited
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- International Coal Ventures Pvt Ltd - India
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Xindia Steels Limited - India
- Parliament of New Zealand
- Sinarmas Energy and Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- MS Steel International - UAE
- Cement Manufacturers Association - India
- PTC India Limited - India
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Rio Tinto Coal - Australia
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- VISA Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Australian Coal Association
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
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