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