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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, 19 August 20
COAL INDIA TRADE UNIONS DEFER DAY-LONG STRIKE: PTI
The unions had decided to go on strike against the commercial mining and the proposed divestment or buyback of shares of Coal India Ltd (CIL).
...
Wednesday, 19 August 20
MISC MARKS ITS MAIDEN FORAY INTO MAJOR DEEP-WATER PROJECT IN LATIN AMERICA WITH MERO 3 FPSO
MISC Berhad (MISC) is pleased to announce its acceptance of Letter of Intent (LOI) from Petróleo Brasileiro S.A. (Petrobras) for the provisi ...
Wednesday, 19 August 20
MARKET INSIGHT - GEORGE LAIOS | INTERMODAL
Since the Covid-19 outbreak, governments and central banks around the globe have been using their ammunition and stimulus packages to keep their ec ...
Wednesday, 19 August 20
INDIA SAW A SHARP DECLINE IN ENERGY COAL IMPORTS IN JANUARY - JUNE 2020; –27 PER CENT YOY - BHP
Energy coal prices were weak in the second half of financial year 2020, BHP says in its Economic and Commodity Outlook FY20.
Accordi ...
Wednesday, 19 August 20
COAL PRICES TO REMAIN SUBDUED THIS FISCAL AMID WEAK DEMAND, HIGH INVENTORY - THE HINDU BUSINESS LINE
Coal offtake is improving gradually as lockdown eases
Coal prices are expected to remain subdued to weak demand and high inventory l ...
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- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Xindia Steels Limited - India
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- White Energy Company Limited
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Miang Besar Coal Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Attock Cement Pakistan Limited
- Economic Council, Georgia
- Central Electricity Authority - India
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Siam City Cement - Thailand
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bhoruka Overseas - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
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