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