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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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Monday, 04 July 22
INDONESIAN COAL PRICE REFERENCE SLIGHTLY DOWN IN JULY
COALspot.com: Indonesian Coal Price Reference for July delivery drops 1.52 per cent month on month.
The Indonesian Coal Price Refere ...
Sunday, 03 July 22
CHINESE VICE PREMIER STRESSES CLEAN, EFFICIENT USE OF COAL - XINHUA
Chinese Vice Premier Han Zheng has stressed efforts to promote the clean and efficient use of coal, and pursue green, low-carbon and high-quality d ...
Sunday, 03 July 22
SOVEREIGN SECTOR OUTLOOK REVISED TO NEUTRAL ON UKRAINE WAR IMPACT - FITCH RATINGS
The deterioration in global sovereign credit conditions this year relative to our expectations at end-2021 has caused Fitch Ratings to change its g ...
Saturday, 02 July 22
GLOBAL SEABORNE COAL EXPORTS IN 2021 INCREASED BY 4.4% Y-O-Y TO 1147 MLN TONNES - BANCHERO COSTA
In the full 12 months of 2021, global seaborne coal exports increased by +4.4% y-o-y to 1147 mln tonnes, from 1099 mln tonnes in 2020, according to ...
Friday, 01 July 22
INDIA'S TOP CEMENT MAKER PAYING FOR RUSSIAN COAL IN CHINESE YUAN - REUTERS
India’s biggest cement producer, UltraTech Cement ULTC.NS, is importing a cargo of Russian coal and paying using Chinese yuan, according to a ...
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- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- The University of Queensland
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- Australian Coal Association
- Independent Power Producers Association of India
- Ind-Barath Power Infra Limited - India
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- Sree Jayajothi Cements Limited - India
- Electricity Authority, New Zealand
- Economic Council, Georgia
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Indo Tambangraya Megah - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Grasim Industreis Ltd - India
- ICICI Bank Limited - India
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- Eastern Coal Council - USA
- VISA Power Limited - India
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
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