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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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Thursday, 05 March 20
SEABORNE COAL'S STRUGGLES IN ASIA ARE MORE THAN JUST CHINA CORONAVIRUS - REUTERS
Asia’s seaborne coal markets stumbled in February and it appears the coronavirus outbreak in China may dodge most of the blame, with the weak ...
Thursday, 05 March 20
INDONESIA'S BUKIT ASAM 2019 OUTPUT RISES 10.2% Y/Y - REUTERS
PT Bukit Asam, Indonesia’s state-owned coal miner, said on Wednesday its output in 2019 rose 10.2% to 29.1 million tonnes.
Coa ...
Thursday, 05 March 20
SEEING REMOTELY - IN SAFETY: BUREAU VERITAS PERFORMS FIRST SURVEY BY DRONE - BUREAU VERITAS
Bureau Veritas Marine & Offshore (BV), a world leader in testing, inspection and certification (TIC) services has completed its first survey by ...
Wednesday, 04 March 20
AN EPIDEMIC OF UNCERTAINTY - THE CORONAVIRUS AND FORCE MAJEURE - WFW
KNOWLEDGE TO ELEVATE
Do the effects of the coronavirus give rise to legitimate force majeure claims in connection with shipbuilding contracts ...
Wednesday, 04 March 20
CHINA IMPORTED 76.8 MLN TONNES OF CRUDE OIL FOR JANUARY & FEBRUARY 2020; UP 3.4% YOY - REFINITIV | BC
The COVID-19 crisis has been gripping China already for almost two months now. It’s having a huge negative impact on the economy, and this is ...
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- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Xindia Steels Limited - India
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Riau Bara Harum - Indonesia
- Banpu Public Company Limited - Thailand
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- PTC India Limited - India
- Posco Energy - South Korea
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- Electricity Generating Authority of Thailand
- Mercuria Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
- Cement Manufacturers Association - India
- Essar Steel Hazira Ltd - India
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Parliament of New Zealand
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Singapore Mercantile Exchange
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Ministry of Transport, Egypt
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- MS Steel International - UAE
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
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