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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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Thursday, 21 June 18
ROBUST ASIAN THERMAL COAL DEMAND CREATES OPPORTUNITIES FOR AUSTRALIA - MINERALS COUNCIL OF AUSTRALIA
Minerals Council of Australia reported, Australia’s world-class coal mining industry can create more jobs in Australia and strengthen t ...
Thursday, 21 June 18
CHINESE REDUCED COAL IMPORT RESTRICTIONS - CAIXIN GLOBAL
Caixin Global reported that the Chinese government has reduced restrictions on coal imports at the nation’s major ports in response to concer ...
Thursday, 21 June 18
INDIAN GOVERNMENT ADMITS COAL SHORTAGE, ASKS DISCOMS TO IMPORT - TIMES OF INDIA
Times of India reported that the power ministry has advised all state governments and private power distribution companies to import coal as Coal I ...
Tuesday, 19 June 18
WCA RESPONDS TO BP STATISTICAL REVIEW OF WORLD ENERGY 2018
Responding to BP’s Statistical Review of World Energy 2018, Benjamin Sporton, Chief Executive of the World Coal Association (WCA) said, &ldqu ...
Wednesday, 13 June 18
U.S. COAL PRODUCTION TO DECLINE BY 2% TO 756 MILLION SHORT TONS MMST IN 2018 - EIA
EIA forecasts U.S. coal production to decline by 2% to 756 million short tons (MMst) in 2018.
According to EIA's Short-Term Ener ...
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- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- Parliament of New Zealand
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Australian Coal Association
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Deloitte Consulting - India
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- SMC Global Power, Philippines
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Electricity Generating Authority of Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Mercuria Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Minerals Council of Australia
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
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