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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, 27 May 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.94 PCT - XINHUA
China Taiyuan coal transaction price index stood at 125.03 points Monday, up 0.94 percent week on week.
The index, released by China ...
Monday, 25 May 20
NON-OPEC OIL SUPPLY DEVELOPMENT - OPEC
Non-OPEC oil supply continued to increase by 2.0 mb/d in 2019, driven by US shale production, which rose by 1.7 mb/d, amounting to 84% of total non ...
Sunday, 24 May 20
A 63,000 FIXED DELIVERY VIETNAM TRIP VIA INDONESIA REDELIVERY KOSICHANG AT $8,500 - BALTIC BRIEFING
Capesize
After a week of bounce momentum the market appears to have stalled out once again. The Capesize 5TC has more than doubled since last F ...
Saturday, 23 May 20
COLOMBIA COAL OUTPUT DOWN 7.2% IN Q1 ON LOW PRICES, CORONAVIRUS LOCKDOWN - REUTERS
Coal production in Colombia, the world’s fifth-largest coal exporter, fell 7.2% in the first quarter because of low prices and coronavirus qu ...
Saturday, 23 May 20
EWP INVITES BIDS FOR 840,000 METRIC TONS OF MIN 5700 NAR COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd (EWP) has Issued an International Tender for total Max 840,000 Metric Tons of min 5 ...
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- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- Essar Steel Hazira Ltd - India
- Globalindo Alam Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- The University of Queensland
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- Agrawal Coal Company - India
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Anglo American - United Kingdom
- The Treasury - Australian Government
- Salva Resources Pvt Ltd - India
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Parliament of New Zealand
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- CNBM International Corporation - China
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Kobexindo Tractors - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
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