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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, 21 January 20
ASIA'S APPETITE FOR COAL GROWS, WITH CHINA THE KEY DECIDER - NIKKEI
Although renewable power generation is expected to rise significantly in Asia, India’s vast electricity needs will still underpin global dema ...
Tuesday, 21 January 20
THERMAL COAL PRICES SET FOR RECOVERY THIS YEAR AS OVERSUPPLY TIGHTENS - REUTERS
Thermal coal prices are expected to recover this year after losing around a third of their value last year as demand from some south-east Asian cou ...
Monday, 20 January 20
INDIA TO STOP SUBSTITUTABLE COAL IMPORT; CAN GO FOR AUCTION OF 100 FULLY EXPLORED NEW BLOCKS: JOSHI - PTI
The Cabinet recently approved promulgation of Mineral Laws (Amendment) Ordinance 2020 to amend Mines and Minerals (Development and Regulation ) Act ...
Monday, 20 January 20
CHINA DECEMBER COAL OUTPUT UP 2.4 PERCENT ON YEAR - STATS BUREAU: REUTERS
China produced 331.74 million tonnes of coal in December, up 2.4 percent on the year, the National Bureau of Statistics said on Friday.
...
Monday, 20 January 20
CHINA IMPORTED 124.4 MLN TONNES OF COAL FROM INDONESIA IN 2019, UP 15.1 PERCENT YOY - BANCHERO COSTA
China's coal imports raced ahead in 2019, surprising many who had expected that in the months of 2019 to come the government would clamp down s ...
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- Antam Resourcindo - Indonesia
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Jaiprakash Power Ventures ltd
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- London Commodity Brokers - England
- Gujarat Sidhee Cement - India
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Mercator Lines Limited - India
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Larsen & Toubro Limited - India
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Planning Commission, India
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Pipit Mutiara Jaya. PT, Indonesia
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- White Energy Company Limited
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
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