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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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Wednesday, 24 July 19
COAL'S DEMISE QUICKENS IN EUROPE AS MARKET SHIFT IDLES PLANTS - BLOOMBERG
Commodity markets are stripping away the case for coal in Europe, moving quicker than government efforts to close the most polluting power plants.
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Monday, 22 July 19
SUPRAMAX: THE ASIAN ARENA SAW INCREASED ACTIVITY AND STRONGER NUMBERS BEING CONCLUDED; INDONESIAN ROUNDS REMAINED FIRM - BALTIC BRIEFING
Capesize
Another week of gains as the Atlantic basin continues to be pressurised on tonnage and Brazilian cargoes keep up a steady flow. The Ca ...
Thursday, 18 July 19
WORLD TRADE IN HARD COAL ROSE BY 4.7% IN 2018 - GERMANY COAL IMPORTERS ASSOCIATION
World Trade in Hard Coal Rose by 4.7% in 2018
Hard Coal Can Prevent Stress in the Electric Power System in Germany
• Sharp decl ...
Wednesday, 17 July 19
MARKET INSIGHT - INTERMODAL
The Strait of Hormuz is one of the most important waterways in the world, connecting crude producers in the Middle East with key markets in the res ...
Tuesday, 16 July 19
KING COAL RULES IN JAPAN AS POWER UTILITIES IN THRALL TO LOW-COST FUEL - REUTERS
Japanese utilities will rely on the return of coal-fired power plants from maintenance to meet peak electricity demand this summer, highlighting th ...
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- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Bhatia International Limited - India
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- Deloitte Consulting - India
- White Energy Company Limited
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Planning Commission, India
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- Toyota Tsusho Corporation, Japan
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Parry Sugars Refinery, India
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- Central Electricity Authority - India
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
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