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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, 10 March 20
CHINA'S COAL-RICH PROVINCE ENSURES ENERGY SUPPLY AMID EPIDEMIC - XINHUA
China’s coal-rich province of Shanxi has seen more than 500 coal mines resume production in February, which ensured energy supply amid the ou ...
Monday, 09 March 20
OPEC+ 'NO DEAL' A BLOW TO THE MARKET - WOOD MACKENZIE
Speaking after today’s OPEC+ meeting broke up, Ann-Louise Hittle, vice president, Macro Oils, at Wood Mackenzie, said: “Today’s o ...
Monday, 09 March 20
KOREA EAST-WEST POWER INVITED BIDS FOR 150,000 MT OF MIN 4,400 - MAX 5,499 NAR COAL
COALspot.com: KOREA EAST-WEST POWER CO. LTD. of South Korea has issued an international tender for total 150,000 MT of LCV coal for May – Jun ...
Sunday, 08 March 20
SUPRAMAX: A 55,000DWT VESSEL FIXING DELIVERY FROM EAST KALIMANTAN FOR A TRIP TO VIETNAM AT $9,100 - BALTIC BRIEFING
SUPRAMAX/ULTRAMAX - A 56,000DWT VESSEL FIXED DELIVERY SOUTH CHINA TRIP VIA INDONESIA, REDELIVERY EAST COAST INDIA, IN THE $6,000S
SUPRAMAX/U ...
Friday, 06 March 20
CHINA RESUMES 83.4 PCT COAL PRODUCTION CAPACITY AMID EPIDEMIC - XINHUA
China has resumed 83.4 percent of its coal production capacity amid the fight against the novel coronavirus outbreak, the National Energy Administr ...
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- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- San Jose City I Power Corp, Philippines
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Parliament of New Zealand
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Mercuria Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Minerals Council of Australia
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Independent Power Producers Association of India
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
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