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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, 24 June 24
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The country’s existing coal-fired power plants are sufficient to ensure enough base load capacity in the next six years, Energy Secretary Rap ...
Friday, 14 June 24
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Friday, 14 June 24
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Thursday, 13 June 24
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- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- CNBM International Corporation - China
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Kobexindo Tractors - Indoneisa
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Planning Commission, India
- Videocon Industries ltd - India
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- The University of Queensland
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- Kideco Jaya Agung - Indonesia
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- Minerals Council of Australia
- Indika Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
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