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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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Friday, 21 February 20
INDIA: POTENTIAL INVESTORS SEEK MORE CLARITY ON COMMERCIAL COAL MINING NORMS - FINANCIAL EXPRESS
Potential private investors have sought more clarity on the pricing mechanism proposed for the much-anticipated auction for commercial coal mining. ...
Thursday, 20 February 20
CHINA RESUMES OVER 70 PCT COAL PRODUCTION CAPACITY AMID EPIDEMIC - XINHUA
China has resumed 70.2 percent of its coal production capacity with output recovering steadily amid the fight against the novel coronavirus epidemi ...
Thursday, 20 February 20
CHINA THERMAL COAL MARKET FACES 2-3 MONTH CORONAVIRUS SHORT SQUEEZE: NOBLE - REUTERS
China’s domestic thermal coal market faces a 2-3 month short squeeze as a rapidly spreading coronavirus outbreak curtails production more tha ...
Wednesday, 19 February 20
KOREA MIDLAND POWER INVITED BIDS FOR 1 MILLION TONS OF HCV AND LCV COAL FOR Q2- Q4 LOADING
COALspot.com: Korea Midland Power Co. Ltd, (KOMIPO). has issued an international tender for total 1 million MT of coal for April to December 2020 l ...
Wednesday, 19 February 20
GLENCORE WRITES OFF ALMOST $1 BILLION AT COLOMBIAN COAL MINES DUE TO FALLING EUROPEAN IMPORTS: BLOOMBERG
The economic case against European coal is proving too much for even Glencore Plc.
The world’s biggest coal shipper cut the va ...
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- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Borneo Indobara - Indonesia
- Deloitte Consulting - India
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Timah Investasi Mineral - Indoneisa
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Australia Pty. Ltd.
- Star Paper Mills Limited - India
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- Aboitiz Power Corporation - Philippines
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Marubeni Corporation - India
- Latin American Coal - Colombia
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
- Economic Council, Georgia
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- Karbindo Abesyapradhi - Indoneisa
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- The University of Queensland
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
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