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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, 22 November 19
FORTY PERCENT OF ADARO'S COAL SALES VOLUME IN 9M19 GOES TO THE SOUTHEAST ASIA REGION
PT Adaro Energy Tbk released its consolidated financial statements yesterday, for the nine month period, ending September 30, 2019.
...
Friday, 22 November 19
UNCERTAINTY IN THERMAL COAL MARKET PERSISTED IN 3Q19 - ADARO
Uncertainty in thermal coal market persisted in 3Q19, mainly due to the actions, or inactions, of China in setting policies for global coal market. ...
Friday, 22 November 19
CIL TO DEVELOP 55 NEW COAL MINES IN NEXT 5 YEARS: COAL MINISTER
State-owned CIL will develop 55 new coal mines and expand 193 existing ones in the next five years, Parliament was informed. The company is also un ...
Thursday, 21 November 19
4TH DEEP OFFSHORE WEST AFRICA CONGRESS 2020
4th Deep Offshore West Africa Congress 2020
17 Janaury 2020
Accra, Ghana
Press Release: Following the great succ ...
Thursday, 21 November 19
INDONESIA PLANS TO KEEP $70/T COAL PRICE CAP FOR PLN, DMO - REUTERS
Indonesia’s energy minister Arifin Tasrif said his ministry plans to maintain a price cap on coal being sold to state electricity utility, PT ...
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- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Aboitiz Power Corporation - Philippines
- Riau Bara Harum - Indonesia
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- The Treasury - Australian Government
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- PTC India Limited - India
- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- Kumho Petrochemical, South Korea
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- PetroVietnam Power Coal Import and Supply Company
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
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