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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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Wednesday, 30 September 20
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Tuesday, 29 September 20
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The index, released by China ...
Tuesday, 29 September 20
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Tuesday, 29 September 20
INDONESIAN COAL COMPANIES' EARNINGS TO WEAKEN IN 2H20 - FITCH RATINGS
Rated Indonesian coal miners and contractors will have weaker operating and financial performances in the second half of 2020 than in the first, sa ...
Tuesday, 29 September 20
RUSSIA'S COAL PRODUCTION TO DROP BY 10.5% IN 2020, SAYS MINISTRY - TASS
Russia’s Economic Development Ministry projects a 10.5% decrease in coal production in the country in 2020 compared with last year to 395 mln ...
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- Economic Council, Georgia
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Petron Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GN Power Mariveles Coal Plant, Philippines
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- Attock Cement Pakistan Limited
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Interocean Group of Companies - India
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Ambuja Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- The University of Queensland
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- Renaissance Capital - South Africa
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- CIMB Investment Bank - Malaysia
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