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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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Monday, 09 October 17
INDONESIAN COAL PRICE REFERENCE HITS NEW HIGH FOR 2017
COALspot.com: Indonesian coal benchmark price surges 2.13% in October month over month, the latest ministerial decree showed.
The benchmark pr ...
Monday, 09 October 17
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Wednesday, 04 October 17
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Tuesday, 03 October 17
VIETNAM'S COAL-FIRED THERMAL POWER DEPENDENT ON CHINA - VIETNAMNET BRIDGE
A report from the Green Innovation and Development Centre (GreenID) showed that, as of the end of last year, of 27 coal-fired thermopower plants, 1 ...
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- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
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- Central Electricity Authority - India
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- Economic Council, Georgia
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- Goldman Sachs - Singapore
- Mjunction Services Limited - India
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- Indogreen Group - Indonesia
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- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- Lanco Infratech Ltd - India
- Latin American Coal - Colombia
- Deloitte Consulting - India
- Thiess Contractors Indonesia
- Planning Commission, India
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
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- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- The University of Queensland
- Indian Oil Corporation Limited
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- MS Steel International - UAE
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
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- Therma Luzon, Inc, Philippines
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- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
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- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Energy Link Ltd, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Tata Chemicals Ltd - India
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Anglo American - United Kingdom
- PTC India Limited - India
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
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- Romanian Commodities Exchange
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- Sindya Power Generating Company Private Ltd
- The State Trading Corporation of India Ltd
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
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- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
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- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
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- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Edison Trading Spa - Italy
- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
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- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
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