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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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Sunday, 21 August 22
COAL-RICH POLAND FACES WINTER OF ENERGY DISCONTENT - DW
Poland uses 10 million tons of coal a year to heat households — a whopping 87% of all coal consumed in EU homes in 2019, according to the War ...
Saturday, 20 August 22
KOSPO TO IMPORT 240000 MT OF MIN 4400 KCAL/KG NCV STEAM COAL FOR OCTOBER;LOADING FROM RUSSIAN PORTS NOT ALLOWED
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 240,000 MT of min 4,400kcal/kg to max. 4,999 kcal/kg NC ...
Wednesday, 17 August 22
INDIAN COMPANIES SWAPPING DOLLAR FOR ASIAN CURRENCIES TO BUY RUSSIAN COAL - REUTERS
Indian companies are using Asian currencies more often to pay for Russian coal imports, according to customs documents and industry sources, avoidi ...
Wednesday, 17 August 22
LNG: MAJOR INVESTMENT AND EXPANSION PHASE, DOUBLING OF LIQUEFACTION CAPACITY BY 2028 PROJECTED - CLARKSONS
Clarksons Research have released the latest version of their long standing annual review, LNG Trade & Transport, on to Shipping Intelligence Ne ...
Wednesday, 17 August 22
UNAFFORDABLE LNG PRICES UNDERMINE RAPID DEMAND GROWTH FORECASTS IN KEY ASIAN MARKETS - IEEFA
Sustained high prices may accelerate downward pressures on Asian LNG demand, clouding long-term industry outlooks
The global liquefi ...
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- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- Port Waratah Coal Services - Australia
- Global Business Power Corporation, Philippines
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Australian Coal Association
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Indogreen Group - Indonesia
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- PTC India Limited - India
- Edison Trading Spa - Italy
- Commonwealth Bank - Australia
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Parliament of New Zealand
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
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