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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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- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Planning Commission, India
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Romanian Commodities Exchange
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- ASAPP Information Group - India
- The University of Queensland
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Africa Commodities Group - South Africa
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- PTC India Limited - India
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- GAC Shipping (India) Pvt Ltd
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
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