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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, 02 January 17
PORT OF NEWCASTLE SHIPPED 13.62 MMT OF COAL IN NOVEMBER; UP 4.18% M/M
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $AU 1,201 Mil ...
Friday, 30 December 16
US WEEKLY COAL PRODUCTION TOTALS 15.2 MMST, DOWN 3.1% - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 15.2 million sho ...
Thursday, 29 December 16
CHINA AIMS TO CAP COAL-FIRED POWER CAPACITY AT 1,100 GIGAWATTS BY THE END OF 2020 - REUTERS
China aims to cap total primary energy consumption at around 4.4 billion tonnes of coal equivalent in 2017, the director of the National Energy Adm ...
Wednesday, 28 December 16
FINANCIAL MARKETS AND COMMODITY MARKETS HAVE ALREADY SHOWED CONSIDERABLE IMPROVEMENT AND RENEWED OPTIMISM - GEORGE LAZARIDIS
As 2016 nears to a close many will be breathing a heavy sigh of relief, having made it through one of the toughest years in this century and lookin ...
Wednesday, 28 December 16
BUMA SIGNED APPROXIMATELY US$ 493 MILLION WORTH OF MINING SERVICES CONTRACTS WITH PT ADARO INDONESIA AND PT ANGSANA JAYA ENERGY
COALspot.com: PT Delta Dunia Makmur Tbk. Has announced that its primary operating subsidiary, PT Bukit Makmur Mandiri Utama ("BUMA") has ...
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- Siam City Cement - Thailand
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- Minerals Council of Australia
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Carbofer General Trading SA - India
- GN Power Mariveles Coal Plant, Philippines
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- Trasteel International SA, Italy
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- Bukit Makmur.PT - Indonesia
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- Maharashtra Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- The University of Queensland
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- PTC India Limited - India
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Directorate Of Revenue Intelligence - India
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- GAC Shipping (India) Pvt Ltd
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- Central Java Power - Indonesia
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
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