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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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Saturday, 17 July 21
COAL PRICES TRADE AT DECADE HIGH OF $140 PER TONNE, HERE ARE SOME FACTORS AT PLAY: CNBC-TV18
Coal prices are trading at $140 per tonne. In the last one week, coal has seen more than 8 percent gains; the last one month has seen 24 percent ju ...
Thursday, 15 July 21
U.S. FOSSIL FUEL CONSUMPTION FELL BY 9% IN 2020, THE LOWEST LEVEL IN NEARLY 30 YEARS - EIA
U.S. fossil fuel consumption fell by 9% in 2020, the lowest level in nearly 30 years
In 2020, total consumption of fossil fuels in t ...
Thursday, 15 July 21
IN 2020, U.S. COAL PRODUCTION FELL TO ITS LOWEST LEVEL SINCE 1965 - EIA
U.S. coal production totaled 535 million short tons (MMst) in 2020, a 24% decrease from the 706 MMst mined in 2019 and the lowest level of coal pro ...
Wednesday, 14 July 21
MARKET INSIGHT - INTERMODAL
In its latest Global Economic Prospects report, the world bank recorded the strongest post-recession global growth in 80 years, but emerging and de ...
Tuesday, 13 July 21
JAPAN STILL SEEKING TO EXPLOIT COAL POWER LOOPHOLES - IEEFA
JBIC wants to continue burdening developing nations with its expensive coal-fired power technology
Japan is continuing to push its expensive c ...
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- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- The Treasury - Australian Government
- Economic Council, Georgia
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Australian Coal Association
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- Cement Manufacturers Association - India
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Altura Mining Limited, Indonesia
- Coal and Oil Company - UAE
- Bangladesh Power Developement Board
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- Kartika Selabumi Mining - Indonesia
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Wilmar Investment Holdings
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Miang Besar Coal Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- IHS Mccloskey Coal Group - USA
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Salva Resources Pvt Ltd - India
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- PowerSource Philippines DevCo
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Power Finance Corporation Ltd., India
- MS Steel International - UAE
- Eastern Coal Council - USA
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
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