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