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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, 02 December 22
INDONESIAN COAL PRICE REFERENCE PLUNGE TOWARD US$ 281.48 A TON AS DEMAND DROPS WORLDWIDE
COALspot.com: The cost of coal is falling so fast that it is beginning to put real money back in the pockets of end-users.
Indonesia ...
Wednesday, 30 November 22
INDONESIA’S BUMI RESOURCES TARGETS 2023 COAL OUTPUT OF 80 MLN TONNES - REUTERS
Indonesian coal miner PT Bumi Resources Tbk BUMI.JKis eyeing a 10% increase in output to 80 million tonnes next year amid expectations for more fav ...
Wednesday, 30 November 22
TANKERS: LONGER HAULS TO SUPPORT CONTINUED STRENGTH - BIMCO
Highlights
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Tuesday, 29 November 22
INDIA TO RECEIVE FIRST LNG CARGO FROM INDONESIA’S TANGGUH LNG - REUTERS
India will receive its first cargo from Indonesia’s Tangguh liquefied natural gas (LNG) plant at the Dahej terminal on Monday, according to a ...
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- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- GAC Shipping (India) Pvt Ltd
- White Energy Company Limited
- GMR Energy Limited - India
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Energy Development Corp, Philippines
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
- Australian Coal Association
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- Mercator Lines Limited - India
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Posco Energy - South Korea
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
- ASAPP Information Group - India
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- Sindya Power Generating Company Private Ltd
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Planning Commission, India
- Singapore Mercantile Exchange
- Kobexindo Tractors - Indoneisa
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