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