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