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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, 27 January 22
2022 - A YEAR OF REBALANCING FOR METALS AND MINING - WOOD MACKENZIE
If 2021 was the year of rebound for metals and mining (M&M) commodities, then 2022 is shaping as the year of rebalance, says Wood Mackenzie, a ...
Wednesday, 26 January 22
MARKET INSIGHT - INTERMODAL
While it is logical that most of the S&P reports of the first weeks of the year are linked to very limited activity as reflected in the weekly ...
Wednesday, 26 January 22
INDONESIA: DME PROJECT IS ECONOMICALLY VIABLE AS STUDY DEMONSTRATES
The government is encouraging downstream coal processing or increase in coal added value, for example by turning coal into Dimethyl Ether (DME) to ...
Wednesday, 26 January 22
COMMODITY PRICES COULD SOAR IF THE RUSSIA-UKRAINE CRISIS ESCALATES - ING
It appears that a number of commodity markets are starting to at least price in some geopolitical risk around the growing tension between Russia an ...
Wednesday, 26 January 22
INDONESIA'S COAL BAN SENDS PRICES SOARING, OTHER EXPORTERS FAIL TO STEP UP - REUTERS
Indonesia’s short-lived ban on exporting coal has sent ructions through the seaborne market for the fuel in Asia, with the fallout likely to ...
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Showing 366 to 370 news of total 6871 |
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- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- Dalmia Cement Bharat India
- Medco Energi Mining Internasional
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- Pendopo Energi Batubara - Indonesia
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- VISA Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Directorate General of MIneral and Coal - Indonesia
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Wilmar Investment Holdings
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Kobexindo Tractors - Indoneisa
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Planning Commission, India
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Mintek Dendrill Indonesia
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Mines - Canada
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- PTC India Limited - India
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
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