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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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- Sinarmas Energy and Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Australian Coal Association
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Sarangani Energy Corporation, Philippines
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- ICICI Bank Limited - India
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- Therma Luzon, Inc, Philippines
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- Posco Energy - South Korea
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Planning Commission, India
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Krishnapatnam Port Company Ltd. - India
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Orica Mining Services - Indonesia
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Dalmia Cement Bharat India
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- GVK Power & Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Parliament of New Zealand
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- South Luzon Thermal Energy Corporation
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
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