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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, 04 September 20
IN A DEEPENING DEBT HOLE OF $34 BILLION, INDONESIA’S PLN MUST STOP DIGGING - IEEFA
The utility has added IDR100 trillion in debt annually for the last five years
Utilities globally started changing the way they do business ye ...
Friday, 04 September 20
KOMIPO INVITED BIDS FOR AUSTRALIAN MIN 5,700 NCV COAL FOR NOVEMBER
COALspot.com: Korea Midland Power Co. Ltd, has issued an International tender for 260,000 MT Min.5,700 kcal/kg NCV coal November, 2020 loading. Acc ...
Thursday, 03 September 20
BRINGING SERVICES OF FTCCI CLOSER TO THE EXPORTERS AT GMR AIR CARGO COMPLEX AT SHAMSHABAD
Press Release: “FTCCI Trade Facilitation Services at your doorstep now” says J.S. Chandrashekar, IRS., Principal Commissioner of Custom ...
Thursday, 03 September 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Wednesday, 02 September 20
COAL PRODUCTION FALLS 7% IN APR-AUG; OFF TAKE DIPS 13.4% - FINANCIAL EXPRESS
In the month of August coal off take also increased 9.3% y-o-y to 44.34 MT as compared with 40.57 MT in the same period last year.
C ...
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- Kohat Cement Company Ltd. - Pakistan
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Carbofer General Trading SA - India
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Agrawal Coal Company - India
- White Energy Company Limited
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Ministry of Mines - Canada
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- Karaikal Port Pvt Ltd - India
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- Thiess Contractors Indonesia
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Anglo American - United Kingdom
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Binh Thuan Hamico - Vietnam
- Samtan Co., Ltd - South Korea
- Siam City Cement PLC, Thailand
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- Uttam Galva Steels Limited - India
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- Economic Council, Georgia
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Directorate Of Revenue Intelligence - India
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- Interocean Group of Companies - India
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
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