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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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Tuesday, 26 July 22
CAP RUSSIA'S OIL PRICE NOW - PROJECT SYNDICATE
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Tuesday, 26 July 22
WILL SOUTH AMERICA’S WINTER DEMAND DRAW LNG CARGOES AWAY FROM EUROPE? - ICIS
South America is now in the middle of its winter demand season. Last year the region increased its share of global LNG imports in winter, with Braz ...
Monday, 25 July 22
GLOBAL 2021 COAL-FIRED ELECTRICITY GENERATION SURGES TO RECORD HIGH - REUTERS
By contrast, mine output was still fractionally below the record set between 2012 and 2014 because older and less efficient coal generators have be ...
Saturday, 23 July 22
THE EU HAS BEEN REDUCING IMPORTS OF RUSSIAN REFINED OIL PRODUCTS SINCE MARCH - BANCHERO COSTA
The European Union could now ban the import and transit of fuel oil from Russia around six months ahead of the planned deadline, an EU official and ...
Saturday, 23 July 22
INDONESIA CONSIDERING SCRAPPING DOMESTIC SALES RULE FOR PALM OIL EXPORTS - REUTERS
Indonesia is considering removing a domestic sales requirement for palm oil exports because high inventories of the vegetable oil have been holding ...
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- Indogreen Group - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Interocean Group of Companies - India
- New Zealand Coal & Carbon
- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- Leighton Contractors Pty Ltd - Australia
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- The University of Queensland
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- TNB Fuel Sdn Bhd - Malaysia
- Kartika Selabumi Mining - Indonesia
- Marubeni Corporation - India
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- Madhucon Powers Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- London Commodity Brokers - England
- Independent Power Producers Association of India
- Xindia Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
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