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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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Friday, 13 August 21
INDONESIA’S COAL EXPORTS TO JAPAN DECLINED BY -26.3% YOY TO 11.9 MLN TONNES IN THE FIRST 7 MONTHS OF 2021; STILL THE SECOND LARGEST SOURCE FOR JAPAN’S COAL IMPORTS IS INDONESIA - BANCHERO COSTA
2020 proved to be a truly terrible year for global seaborne coal trade. Total global loadings in the 12 months of 2020 were down -12.7% year-on-yea ...
Thursday, 12 August 21
ONLY 3 VLCCS SOLD FOR DEMOLITION IN 2021 AS SECONDHAND PRICES TEMPT - BIMCO
During the first seven months of 2021, only three actively trading Very Large Crude Carriers (VLCCs) have been sold for demolition. The current mar ...
Wednesday, 11 August 21
U.S: EIA EXPECTS COAL EXPORTS TO TOTAL 90 MMST IN 2021, 30% INCREASE FROM 2020
Coal production in EIA's forecast totals 607 million short tons (MMst) in 2021, an increase of 13% over 2020.
EIA is also ...
Wednesday, 11 August 21
MARKET INSIGHT - INTERMODAL
Energy is at the core of the global climate dialogue as the climate challenge is essentially an energy challenge. Policy experts around the world a ...
Tuesday, 10 August 21
34 INDONESIAN COAL COMPANIES TEMPORARILY BANNED FOR COAL EXPORTS
The Ministry of Energy and Mineral Resources (ESDM) has imposed sanctions in the form of a coal export ban for 34 coal companies as reported by CNB ...
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- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- The University of Queensland
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Intertek Mineral Services - Indonesia
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- VISA Power Limited - India
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Coalindo Energy - Indonesia
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- Georgia Ports Authority, United States
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Indian Oil Corporation Limited
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- Indogreen Group - Indonesia
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- LBH Netherlands Bv - Netherlands
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