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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 September 22
INDONESIA COAL PRICE REFERENCE SLIPS SLIGHTLY IN SEPTEMBER 2022
COALspot.com: Indonesian Coal Price Reference for September delivery drops 0.74 per cent month on month.
The Indonesian Coal Price R ...
Friday, 02 September 22
ABM INVESTAMA BUYS 30% GEMS SHARES FOR US$ 420 MILLION
PT ABM Investama Tbk through its indirect subsidiary, bought a 30% stake in the PT Golden Energy Mines Tbk for US$ 420 million or around Rp 6.2 tri ...
Wednesday, 31 August 22
MARKET INSIGHT - INTERMODAL
Scorching temperatures and extremely dry conditions during the Northern hemisphere summer have been drying crops. Yield prospects have subsided in ...
Tuesday, 23 August 22
HIGH COAL PRICES COULD BOOST INDONESIA'S ENERGY TRANSITION - IEEFA
Global coal prices have reached an all-time high as countries stop purchasing Russian coal amidst the Russia-Ukraine conflict. Indonesian coal comp ...
Tuesday, 23 August 22
A COMBINED US$6.8-BILLION CASH BALANCE OF INDONESIAN COAL COMPANIES COULD PROVIDE FOR TIMELY INVESTMENTS IN GREEN TRANSITION - IEEFA
A combined US$6.8-billion cash balance of Indonesian coal companies could provide for timely investments in green transition
The opp ...
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- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Sical Logistics Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Carbofer General Trading SA - India
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Goldman Sachs - Singapore
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Vijayanagar Sugar Pvt Ltd - India
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