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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, 11 March 16
ADANI GLOBAL BAGS 0.26 MILLION TONS OF COAL CONTRACT FROM LANKA COAL COMPANY
COALspot.com: Lanka Coal Company (Private) Limited, Sri Lanka has awarded 260,000 +/- 10% tons of Power plant 6300 GAR calorific value coal to Adan ...
Friday, 11 March 16
US WEEKLY COAL PRODUCTION DOWN BY 0.5 MMST
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 12.6 million shor ...
Friday, 11 March 16
FORTESCUE'S MOU WITH VALE COULD STRENGTHEN ITS BUSINESS PROFILE - FITCH
COALspot.com: Fitch Ratings says that Australia-based Fortescue Metals Group Limited's (BB+/Negative) memorandum of understanding (MOU) with Br ...
Thursday, 10 March 16
CHINA'S NEW POLICY PLAN COULD BE POSITIVE FOR SHIPPING, BUT TARGETS SEEM RATHER AMBITIOUS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
China set out its new policy plan during the course of the past weekend, but it seems to have set some very ambitious goals, which could be difficu ...
Thursday, 10 March 16
U.S. COAL EXPORTS DECLINED 23% IN 2015, AS COAL IMPORTS REMAINED STEADY
COALspot.com: The United States remains a net exporter of coal, exporting 74.0 million short tons (MMst) and importing 11 MMst in 2015.
Accord ...
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- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- Indian Oil Corporation Limited
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- The University of Queensland
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Samtan Co., Ltd - South Korea
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Cement Manufacturers Association - India
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