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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, 21 August 20
BHP COMMITS TO SELLING ITS THERMAL COALMINES WITHIN TWO YEARS - THE GUARDIAN
Move follows pressure from investors but company stops short of full exit from coalmining
BHP has announced it plans to sell off its ...
Thursday, 20 August 20
MINER BHP CONFIRMS PLANS TO EXIT THERMAL COAL SECTOR - THE SYDNEY MORNING HERALD
The head of mining giant BHP has laid out plans for a reshaping of its global operations by seeking to quit thermal coal mining, offload some cokin ...
Thursday, 20 August 20
LONDON RETAINS ARBITER CROWN - BALTIC EXCHANGE | HFW
Fears that the UK’s decision to leave the European Union would dent the reputation of the nation’s capital as the leader in maritime ar ...
Wednesday, 19 August 20
U.S. COAL STOCKPILES STEADILY INCREASE AFTER REACHING LOWEST LEVEL IN A DECADE IN 2019 - EIA
After reaching their lowest level in more than a decade in March 2019, U.S. coal stockpiles steadily increased to 152 million tons in April 2020, r ...
Wednesday, 19 August 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.26 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.92 points Monday, down 0.26 percent week on week.
The index, released by Chi ...
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- Metalloyd Limited - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Anglo American - United Kingdom
- Ambuja Cements Ltd - India
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- McConnell Dowell - Australia
- White Energy Company Limited
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Riau Bara Harum - Indonesia
- Bhoruka Overseas - Indonesia
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- The University of Queensland
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Sojitz Corporation - Japan
- Planning Commission, India
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GMR Energy Limited - India
- Minerals Council of Australia
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- Wood Mackenzie - Singapore
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
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