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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, 24 April 20
COAL INDIA TO PRODUCE 710 MT COAL - MINISTER OF COAL AND MINES
Coal India Limited (CIL) will produce 710 million tonnes (MT) of coal and company’s coal off take target will also remain at710 MT for this f ...
Friday, 24 April 20
CHINA COAL PRODUCER YANZHOU COAL POSTS 9.6 PCT RISE IN 2019 NET PROFIT - XINHUA
China’s major coal producer Yanzhou Coal Mining Co., Ltd. said Thursday that its net profit saw a 9.6 percent rise in 2019.
Th ...
Tuesday, 21 April 20
INDONESIA ACCOUNTS FOR 19% OF JAPAN'S TOTAL COAL IMPORTS - BANCHERO COSTA
Coal trade in Asia is proving remarkably resilient this year, despite the global economic impact from COVID-19.
We have seen China&r ...
Tuesday, 21 April 20
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KNOWLEDGE TO ELEVATE
Whilst the plight of cruise ships, stranded off shore with sick passengers and crew, may be dominating media headlines, t ...
Monday, 20 April 20
SUPRAMAX: A 52,000DWT SHIP FIXING AN INDONESIA COAL RUN TO CHINA AT $4400 - BALTIC BRIEFING
Capesize
This week was the strongest period seen for the Capesize market in several months. All routes globally succumbed to improved sentiment ...
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- Kartika Selabumi Mining - Indonesia
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- PTC India Limited - India
- GAC Shipping (India) Pvt Ltd
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vizag Seaport Private Limited - India
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- Australian Coal Association
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Parliament of New Zealand
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- Siam City Cement PLC, Thailand
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Manunggal Multi Energi - Indonesia
- Sojitz Corporation - Japan
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- Planning Commission, India
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Thiess Contractors Indonesia
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