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