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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, 04 January 19
FOCUS IS ON BOOSTING COAL PRODUCTION: INDIAN COAL MINISTER
The current focus of the government is on boosting production from operational coal mines, according to Minister for Coal, Piyush Goyal.
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Thursday, 03 January 19
CAPESIZE: A MORE POSITIVE START OF THE NEW YEAR THAN EXPECTED FOR THE BIG SHIPS - FEARNLEYS
Capesize
A more positive start of the new year than expected for the big ships, with average gains of US$ 500/day posted on the first tra ...
Tuesday, 01 January 19
INDONESIA: COAL PRODUCTION EXPECTED TO EXCEED THIS YEAR'S TARGET - JP
Indonesian coal production reached 456 million tons up to Thursday or 94.02 percent of this year’s total target of 485 million tons, accordin ...
Monday, 31 December 18
THE INDONESIAN COAL MARKET Q1 '19 FORECAST: LOOKS DIRECTIONLESS - TRADER
The Indonesian coal market looks directionless, an International coal trader said when we asked him to give his forecast for 1Q' 2019.
...
Monday, 31 December 18
GLOBAL COAL DEMAND GREW BY 1% IN 2017; GLOBAL COAL POWER GENERATION INCREASED BY OVER 250 TWH - IEA
After two years of decline, global coal demand grew by 1% in 2017 to 7585 Mt as stronger global economic growth increased both industrial output an ...
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- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Petrochimia International Co. Ltd.- Taiwan
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Baiduri Energy - Indonesia
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- Salva Resources Pvt Ltd - India
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- ASAPP Information Group - India
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Interocean Group of Companies - India
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Parliament of New Zealand
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Coal Association
- Indogreen Group - Indonesia
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Madhucon Powers Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Grasim Industreis Ltd - India
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Star Paper Mills Limited - India
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
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