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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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Thursday, 05 March 15
INDIA WILL BE THE LARGEST DRIVER OF GLOBAL SEABORNE COKING COAL DEMAND GROWTH IN 2015 - WOOD MACKENZIE
Global demand growth will remain weak because of China’s negative demand growth.
COALspot.com: At Coaltrans India, Wood Mackenzie says I ...
Thursday, 05 March 15
BUKIT ASAM BOOKED US$ 1 BILLION REVENUE IN 2014
COALspot.com: Indonesian publicly listed and state owned coal miner PT. Bukit Asam, has announced that, the revenue of the company for the period J ...
Wednesday, 04 March 15
AN AGENDA FOR CHANGE - FITCH INDONESIA CONFERENCE
Fitch Indonesia Conference - 5 March 2015
Fitch Ratings will host its annual Indonesia conference on 5 March 2015.
The theme of this year ...
Wednesday, 04 March 15
KEEP CALM AND INVEST IN DRY - THEODORE NTALAKOS
Keep Calm and Carry On was originally a motivational poster, intended to raise the morale of the British public, produced by the British government ...
Tuesday, 03 March 15
INDONESIAN COAL EXPORT VOLUME TO DECLINE 50% BY 2019
COALspot.com: The Indonesian government is planning to reduce coal export volume by 50% within the next five years while keeping its coal productio ...
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- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Thai Mozambique Logistica
- Australian Coal Association
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jindal Steel & Power Ltd - India
- Kaltim Prima Coal - Indonesia
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- Minerals Council of Australia
- Bhushan Steel Limited - India
- PTC India Limited - India
- IHS Mccloskey Coal Group - USA
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- Goldman Sachs - Singapore
- The University of Queensland
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- The State Trading Corporation of India Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
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