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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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Monday, 23 September 19
CHINA RECORDS SLOWER GROWTH IN COAL PRODUCTION - XINHUA
The growth of China’s raw coal production slowed down in August, data from the National Bureau of Statistics (NBS) showed.
Aro ...
Friday, 20 September 19
INDIA TO INVITE BIDS FOR COMMERCIAL COAL MINING IN DECEMBER - MINISTER FOR COAL
India aims to begin the process of holding the first round of commercial coal mining auctions December end, Minister for Coal, Mines and Parliament ...
Friday, 20 September 19
INDIA: ECONOMIC SLOWDOWN IMPACTS COAL IMPORT CARGO IN H1 FY20 - PTI
Economic slowdown has impacted coal import cargo in the first half of this fiscal, as overall cargo growth at major ports registered a marginal gro ...
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SHIPPING MARKET INSIGHT - INTERMODAL
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Tuesday, 17 September 19
PANAMA SHIP REGISTRY MODERNIZES SHIP REGISTRATION
The Panama Ship Registry has announced it will integrate in a single platform “Electronic Ship Registration System (ESRS)” the present ...
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- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Kideco Jaya Agung - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Mines - Canada
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- McConnell Dowell - Australia
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Marubeni Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- The University of Queensland
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- Cement Manufacturers Association - India
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- Global Green Power PLC Corporation, Philippines
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
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