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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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- Tamil Nadu electricity Board
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- The University of Queensland
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Toyota Tsusho Corporation, Japan
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Borneo Indobara - Indonesia
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Coalindo Energy - Indonesia
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Medco Energi Mining Internasional
- Parliament of New Zealand
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- CNBM International Corporation - China
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Minerals Council of Australia
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Global Green Power PLC Corporation, Philippines
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- White Energy Company Limited
- New Zealand Coal & Carbon
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- Romanian Commodities Exchange
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