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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, 19 July 22
SEEING RED? - WOOD MACKENZIE
What a Republican mid-term victory could mean for US energy and climate policy
According to current polling the Republican Party has ...
Thursday, 14 July 22
INDIA'S COAL IMPORTS HIT RECORD HIGH IN JUNE - REUTERS
India's coal imports hit a record high in June despite high global prices, data from three trade sources and Refinitiv ship tracking showed, as ...
Thursday, 14 July 22
CHINA'S JUNE COAL IMPORTS SLUMP AS TRADERS SHUN EXPENSIVE OVERSEAS CARGOES - REUTERS
China’s coal imports fell 33% in June from a year ago, with traders turning down expensive overseas cargoes in favor of domestic ones with ca ...
Wednesday, 13 July 22
KOWEPO TO IMPORT 2.79 MILLION TONS OF LOW TO MEDIUM COAL
COALspot.com: Korea Western Power Co., Ltd. (KOWEPO) has issued an International tender for Total 1360k MT of Min.4400 kcal/kg NCV coal and Total 1 ...
Wednesday, 13 July 22
HAVE MINERS MISSED THE BOAT TO INVEST AND GET AHEAD OF THE ENERGY TRANSITION? - WOOD MACKENZIE
Miners are in rude health, benefiting from economic stimuli, the post-pandemic recovery and associated supply constraints. Initially the Ukraine wa ...
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- Planning Commission, India
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- GN Power Mariveles Coal Plant, Philippines
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- Orica Australia Pty. Ltd.
- Economic Council, Georgia
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Salva Resources Pvt Ltd - India
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- ICICI Bank Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Parliament of New Zealand
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Commonwealth Bank - Australia
- Chettinad Cement Corporation Ltd - India
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- White Energy Company Limited
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- VISA Power Limited - India
- Sakthi Sugars Limited - India
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Bhoruka Overseas - Indonesia
- Carbofer General Trading SA - India
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
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