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