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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, 09 August 21
AIIB MAY OFFICIALLY END COAL FINANCING IN 2022 - CHINA DAILY
The Asian Infrastructure Investment Bank may officially rule out coal projects if it updates its energy strategy next year, after shunning funding ...
Monday, 09 August 21
CHINA COAL INVENTORY THINS AMID PEAK POWER DEMAND- STATE MEDIA : REUTERS
China’s coal inventories have dropped to near historic lows since August due to peak summer electricity demand and transportation bottlenecks ...
Wednesday, 04 August 21
THE INDONESIAN COAL PRICE REFERENCE SURGED TO A FRESH RECORD HIGH OF USD 130.99 A TON IN AUGUST 2021
COALspot.com: The Indonesian Coal Price Reference ( HBA) surged to a fresh record high of USD 130.99 a ton in August 2021.
The ...
Wednesday, 04 August 21
MARKET INSIGHT - INTERMODAL
Unlike the Dry Bulk and Container sectors where freight rates have surged into 2021, the tankers market continues to experience lackluster earnings ...
Sunday, 01 August 21
SEABORNE HARD COAL TRADE IN 2020 DECREASED BY 149 MILLION MT, OR 12.1%, TO 1,083 MILLION MT - GERMAN COAL IMPORTERS ASSOCIATION
- Reduced coal-fired power plant fleet secures Germany’s power supply in severe winter of 2020/2021; little wind availability and hence stron ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- SN Aboitiz Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Australian Coal Association
- Makarim & Taira - Indonesia
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- IEA Clean Coal Centre - UK
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Central Java Power - Indonesia
- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- VISA Power Limited - India
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Minerals Council of Australia
- Bangladesh Power Developement Board
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- San Jose City I Power Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- New Zealand Coal & Carbon
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- AsiaOL BioFuels Corp., Philippines
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