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