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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, 12 April 19
OFFSHORE MENA CONGRESS 2019
Offshore MENA Congress 2019
Event Date : 11-12th Jun. 2019
Location : Cairo, Egypt
Offshore MENA Congress 2019 Offshor ...
Friday, 12 April 19
U.S : MORE THAN 7 GW OF COAL-FIRED GENERATION IS SCHEDULED TO RETIRE BY THE END OF 2020 - EIA
EIA estimates that U.S. coal production decreased by 19 million short tons (MMst) (2%) in 2018, totaling 756 MMst.
EIA also expects ...
Friday, 12 April 19
GLENCORE WINS $520 MILLION DEAL TO SELL COAL TO MEXICO - REUTERS
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Thursday, 11 April 19
AUSTRALIAN COAL IN THE FRONTLINE OF CHINA'S SUPPLY GLUT - AUSTRALIAN FINANCIAL REVIEW
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Wednesday, 10 April 19
COALTRANS ASIA - TAKE PART IN THE LARGEST COAL EVENT IN THE WORLD!
Take part in the largest coal event in the world!
Coaltrans Asia is back this June bringing together the entire international coal s ...
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- ASAPP Information Group - India
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Central Java Power - Indonesia
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Carbofer General Trading SA - India
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Dalmia Cement Bharat India
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Heidelberg Cement - Germany
- Posco Energy - South Korea
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Videocon Industries ltd - India
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Romanian Commodities Exchange
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- VISA Power Limited - India
- Malabar Cements Ltd - India
- The University of Queensland
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- Star Paper Mills Limited - India
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- PTC India Limited - India
- Ministry of Mines - Canada
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
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