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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, 11 January 20
BALTIC BRIEFING TANKER REPORT - WEEK 2
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Saturday, 11 January 20
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Friday, 10 January 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remains flat
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Thursday, 09 January 20
NEW IMO LIFEBOAT REQUIREMENTS ENTER INTO FORCE - STANDARD CLUB
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Three new compulsory IMO resolutions entered into force on 1 January 2020. These resolutions deal with the maintenance, t ...
Thursday, 09 January 20
INDIA'S NEW EASED MINING RULES TO ENHANCE FOREIGN PARTICIPATION IN COAL SECTOR: MINISTER
India’s cabinet has eased mining laws in a bid to attract foreign players to the domestic coal sector and reduce imports of the fuel, coal mi ...
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- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- The University of Queensland
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sical Logistics Limited - India
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
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