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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, 15 October 19
INDIA READIES POLICY TO ATTRACT FOREIGN INVESTMENT IN COAL MINING - REUTERS
India expects to have formulated a policy within the next two weeks to attract foreign investment to its coal mining industry, the country's Co ...
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INDONESIA: PANAMAX VESSELS OPEN SOUTH CHINA WERE REPORTEDLY FIXED AT $14,000 LEVEL, WITH REDELIVERY BACK IN CHINA - BALTIC BRIEFING
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Friday, 11 October 19
INDIAN MINERS REJECT PLAN TO LINK NATIONAL COAL INDEX TO FOREIGN PRICES - REUTERS
India’s miners are rejecting a government proposal to establish a national coal index that would be linked to international prices, documents ...
Friday, 11 October 19
THE OCTOBER BENCHMARK PRICE OF INDONESIAN THERMAL COAL DECLINES TO LOWEST SINCE OCTOBER 2016
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
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- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- PTC India Limited - India
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- Australian Coal Association
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- Marubeni Corporation - India
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercuria Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
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