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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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Tuesday, 07 July 20
WHAT DOES THE PATHWAY TO A NET-ZERO ECONOMY LOOK LIKE FOR MINERS? - WOOD MACKENZIE
Wind, solar, electric vehicles, stationary storage and transmission are all central to achieving the Paris Agreement decarbonisation goals.
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Monday, 06 July 20
INDONESIAN COAL PRICE REFERENCE IN FREE FALL
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Monday, 06 July 20
SUPRAMAX: A 58,000-DWT FIXING DELIVERY VIETNAM TRIP VIA INDONESIA RE-DELIVERY WEST INDIA IN THE LOW $4,000S
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The Capesize market continues to go from strength to strength, as rates reach highs not seen since September last year. The rally is p ...
Thursday, 02 July 20
PRIVATE COAL MINING MAY SEE WEAK INVESTOR SENTIMENT: ICRA - LIVEMINT
The prospects of commercial coal mining in India may be dimmer than initially expected because of the expected shift in India’s energy mix fr ...
Wednesday, 01 July 20
THERMAL COAL OPTIONS TRADING LAUNCHED IN CHINA'S ZHENGZHOU - XINHUA
Thermal coal options started trading on the Zhengzhou Commodity Exchange (ZCE) in central China’s Henan Province Tuesday.
It i ...
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- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- PTC India Limited - India
- Malabar Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Sakthi Sugars Limited - India
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- Aditya Birla Group - India
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Star Paper Mills Limited - India
- Planning Commission, India
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Maharashtra Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- LBH Netherlands Bv - Netherlands
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- VISA Power Limited - India
- Ind-Barath Power Infra Limited - India
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
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