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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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Saturday, 31 October 15
ADARO ENERGY'S CORE EARNINGS DECLINE 21 PER CENT FOR THE NINE MONTHS PERIOD TO SEPTEMBER 2015
COALspot.com: Adaro Energy's core earnings decline 21% to US$228 Million for first 9months of this year compared to the same period last year. ...
Friday, 30 October 15
INDONESIA'S COAL EXPORTS DROP ON LOW PRICES - THE JAKARTA POST
Indonesia's coal exports significantly dropped in the first nine months of the year as coal companies continued to suffer from low prices in ad ...
Friday, 30 October 15
CHINESE MINERAL IMPORTS: MOVING ON FROM INDONESIA? - CLARKSONS
China has accounted for almost 90% of global imports of nickel ore and bauxite in recent years and was therefore heavily hit by the Indonesian mine ...
Friday, 30 October 15
COAL PRODUCTION IN THE UNITED STATES INCREASED THIS WEEK - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.5 million shor ...
Thursday, 29 October 15
IRAN'S RETURN TO OIL MARKETS WILL HAVE TEMPERED IMPACT FOR THE TANKER SHIPPING INDUSTRY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
While many analysts appear to be fearful of a potential incremental rise in tanker ships’ supply, as a result of the imminent return of Iran ...
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- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- Mintek Dendrill Indonesia
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Ministry of Transport, Egypt
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Bhoruka Overseas - Indonesia
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- Eastern Coal Council - USA
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Economic Council, Georgia
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Madhucon Powers Ltd - India
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- PTC India Limited - India
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Ind-Barath Power Infra Limited - India
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- ICICI Bank Limited - India
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
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