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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, 29 March 22
MEMR OF INDONESIA HAS FIXED COAL PRICE AT US$ 90 PER TONNE FOR DOMESTIC INDUSTRIES EXCEPT SMELTER INDUSTRIES; FOR PLN USD 70 IS APPLICABLE
Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif has set the selling price of coal for domestic, industrial except metal processing an ...
Monday, 21 March 22
A FORCE MAJEURE TO BE RECKONED WITH - BALTIC EXCHANGE
Sanctions cause payment confusion
This dispute in MUR Shipping BV v. RTI Ltd [2022] EWHC 467 (Comm) related to an owner’s purported exercis ...
Monday, 21 March 22
CHINA'S COAL OUTPUT UP 10.3 PCT IN FIRST TWO MONTHS - XINHUA
China’s raw coal output posted fast growth in the first two months of 2022, while coal imports continued to shrink, official data showed.
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Tuesday, 15 March 22
INDUSTRY VETERANS & ORGANIZATIONS HONOURED WITH THE PRESTIGIOUS SHIPTEK INTERNATIONAL AWARDS 2022
Press Release: The 15th edition of the prestigious ShipTek International Conference & Awards 2022 concluded successfully from March 7th - 8th 2 ...
Tuesday, 15 March 22
CHINA'S COAL OUTPUT GROWS TO STABILIZE MARKET SUPPLY - XINHUA
China’s coal market has seen growth in output since late February amid the country’s efforts to stabilize production and ensure supply, ...
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- Sojitz Corporation - Japan
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- Planning Commission, India
- Semirara Mining Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- White Energy Company Limited
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Petron Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Chamber of Mines of South Africa
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- Economic Council, Georgia
- ICICI Bank Limited - India
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Madhucon Powers Ltd - India
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- Aditya Birla Group - India
- PTC India Limited - India
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
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