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