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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, 17 December 19
AUSTRALIA ENERGY MARKET OPERATOR TURNS SCROOGE ON COAL LOBBY: RUSSELL
Australia, which vies with Indonesia for the title of the world’s largest coal exporter, is planning for an electricity future where use of t ...
Tuesday, 17 December 19
BACK TO FUTURE FOR BUSH AS AUSTRALIA CONSIDERS MOVING AWAY FROM COAL NEWCASTLE - HERALD
Looking backwards could show the way forward for regional communities planning for a future beyond mining.
One of Australia’s ...
Tuesday, 17 December 19
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.01 PCT - XINHUA
China Taiyuan coal transaction price index stood at 133.16 points, down 0.01 percent week on week.
The index, released by China Taiy ...
Tuesday, 17 December 19
YEAR 2019: IT IS LOOKING SET THAT THIS YEAR WILL BE ONE OF THE SLOWEST IN TERMS OF DRY BULK NEWBUILDING ACTIVITY - ALLIED
With just two weeks remaining before 2019 comes to an end, it is now looking set that this year will be one of the slowest in terms of dry bulk new ...
Monday, 16 December 19
ULTRAMAX: A 63,000DWT SHIP FIXING DELIVERY FOR A SINGAPORE TRIP VIA INDONESIA, FOR RE-DELIVERY TO CHINA AT $11,000 - BALTIC BRIEFING
Capesize
It was one-way traffic for the Capesize market this past week, with all routes giving up value. While downward momentum may have slowe ...
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- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Electricity Authority - India
- The University of Queensland
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement - Thailand
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bharathi Cement Corporation - India
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Videocon Industries ltd - India
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- International Coal Ventures Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Sakthi Sugars Limited - India
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- VISA Power Limited - India
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Thiess Contractors Indonesia
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
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