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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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Saturday, 25 March 23
COAL INDIA HAS STRONG CASE TO INCREASE PRICES, TALKS ON: CMD AGRAWAL - BUSINESS STANDARD
Coal India (CIL) Chairman and Managing Director Pramod Agrawal said on Monday there is a “strong case” for increasing coal prices, and ...
Saturday, 25 March 23
ASIAN CRUDE PALM OIL WATCH 1Q23 - FITCH RATINGS
Malaysian benchmark crude palm oil (CPO) spot prices have averaged around USD915 per tonne (t) so far in 1Q23, sharply lower than the average of ar ...
Saturday, 25 March 23
INDONESIA’S COAL EXPORT INCREASED BY 21.0% YOY TO 388.4 MLN T IN 2022 - BANCHERO COSTA
After a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels. In the f ...
Saturday, 25 March 23
GLOBAL LNG-ASIA SPOT PRICES SLIP AS WEAK NORTHERN DEMAND REMAINS - REUTERS
Asian spot prices of liquefied natural gas (LNG) declined this week, falling to a 21-month low, as weak demand in the northeast Asia region continu ...
Wednesday, 22 March 23
OIL PRICE FALL SPECULATIVE, TO HIT $140 BY YEAR-END -ANDURAND: REUTERS
The recent fall in oil prices due to banking jitters is speculative and oil will hit $140 a barrel by the end of the year, hedge fund manager Pierr ...
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- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Bharathi Cement Corporation - India
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- Thiess Contractors Indonesia
- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- White Energy Company Limited
- ASAPP Information Group - India
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Port Waratah Coal Services - Australia
- LBH Netherlands Bv - Netherlands
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Central Electricity Authority - India
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
- PetroVietnam Power Coal Import and Supply Company
- Orica Australia Pty. Ltd.
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Minerals Council of Australia
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
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