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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, 24 June 19
KOMIPO INVITED BITUMINOUS COAL BIDS FOR BORYEONG & SHIN BORYEONG POWER PLANTS
South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 260,000 MT MT of min. 5700 NAR coal and 240,000 MT of min. 4,600 k ...
Sunday, 23 June 19
SUPRAMAX: A 56,000-DWT WAS FIXED FROM INDONESIA TO VIETNAM AT $10,000 - BALTIC BRIEFING
Capesize
The story over the past week has been largely Atlantic dominated as the basin’s uniquely volatile characteristics came into play ...
Saturday, 22 June 19
OPEC'S BATTLE FOR CONTROL OF THE OIL MARKET - WOOD MACKENZIE
Oil supply is confounding expectations. We have just raised our forecasts for non-OPEC production, the latest in a series of incremental increases. ...
Friday, 21 June 19
INDONESIA'S BAYAN RESOURCES SIGNED A COAL SUPPLY AGREEMENT WITH THE BANGLADESH BCPCL TO SUPPLY 23 MILLION TONS OF COAL FOR 10 YEARS
On Monday, 17th June 2019, PT. Bayan Resources signed a Coal supply Agreement with the Bangladesh- China Power Company (Pvt.) Limited. BCPCL is a j ...
Thursday, 20 June 19
BUMI RESOURCES EXPECTS TO SELL 42 MILLION TONS OF COAL IN FIRST HALF - JAKARTA POST
PT Bumi Resources (BUMI), Indonesia's largest thermal coal miner, expects to close the first half of this year with coal sales of 42 million to ...
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- Wilmar Investment Holdings
- Interocean Group of Companies - India
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Xindia Steels Limited - India
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- Antam Resourcindo - Indonesia
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- The University of Queensland
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Karaikal Port Pvt Ltd - India
- White Energy Company Limited
- Latin American Coal - Colombia
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Goldman Sachs - Singapore
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Thiess Contractors Indonesia
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Kartika Selabumi Mining - Indonesia
- Posco Energy - South Korea
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Parry Sugars Refinery, India
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
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