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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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Sunday, 11 July 21
COAL SHOWS ITS STAYING POWER AS ECONOMIES BOUNCE BACK - THE WALL STREET JOURNAL
Coal use is surging in some of the world’s largest economies as electricity demand rebounds from the pandemic, illustrating the challenges to ...
Sunday, 11 July 21
ROBUST CHINA COAL DEMAND AMID AUSTRALIA IMPORT BAN FUELS PRICE RALLY - REUTERS
Seaborne coal has become a quiet winner among energy commodities, lacking the attention of higher-profile crude oil and liquefied natural gas (LNG) ...
Saturday, 10 July 21
OVERESTIMATED LCOES OF COAL-FIRED POWER PLANTS CREATE A FINANCIAL BUBBLE - IEEFA
Massive stranded asset risk detrimentally affects the financial and power distribution
India’s future coal-fired power project pipeline ...
Friday, 09 July 21
EIA FORECASTS COAL’S GENERATION SHARE IN U.S TO RISE FROM 20% IN 2020 TO 24% THIS YEAR BUT TO FALL TO 22% NEXT YEAR
The July Short-Term Energy Outlook (STEO) of EIA remains subject to heightened levels of uncertainty related to the ongoing economic recovery from ...
Friday, 09 July 21
KOREA SOUTH-EAST POWER CO., LTD. INVITES BIDS FOR 1.86 MILLION TONS OF COAL OF 5600 & 4000 NCV COAL FOR THREE YEARS
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 280,000 – 300,000 MT of Min. ...
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- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- Australian Coal Association
- Wood Mackenzie - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Planning Commission, India
- IEA Clean Coal Centre - UK
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Africa Commodities Group - South Africa
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- McConnell Dowell - Australia
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Gujarat Sidhee Cement - India
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Orica Australia Pty. Ltd.
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Minerals Council of Australia
- TNB Fuel Sdn Bhd - Malaysia
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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