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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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Friday, 09 July 21
CAN WE EXPECT AFFORDABLE POWER SUPPLY BY REPLACING COAL BASED POWER WITH LNG? - FINANCIAL EXPRESS
Bangladesh government’s recent decision to cancel the contracts for 10 coal fired power plants in late June 2021 has invited interest in the ...
Thursday, 08 July 21
STRONGEST HALF YEAR FOR SHIPPING MARKETS SINCE 2008 - CLARKSONS
A year on from peak trade disruption, we update our half year report for the shipping industry profiling a strong recovery and some exceptional ind ...
Tuesday, 06 July 21
INDONESIA COAL PRICE REFERENCE RISES TO 112 MONTHS HIGH IN JULY 2021; 121.15% HIGHER COMPARED TO THAT IN JULY 2020 PRICE
COALspot.com: The Indonesia coal price reference for July 2021 fixed at US$ 115.35 per ton FOB vessel.
The Indonesia coal price referenc ...
Tuesday, 06 July 21
INDONESIAN COAL EXPORTS FELL BY 37% YOY IN 1Q21 DUE TO ADVERSE WEATHER CONDITIONS - FITCH RATINGS
Chinese coal imports declined by 25% yoy in 5M21as a result of both restrictions on Australian coal and the high base in 2020. Import volume in Jan ...
Tuesday, 06 July 21
INDONESIAN 4,200 INDEX HAS ALSO INCREASED TO OVER USD50 PER TONNE SINCE MAY THIS YEAR REFLECTING STRONG CHINESE IMPORT DEMAND - FITCH RATINGS
Price Surge Since March
APAC thermal coal has resumed its price surge since March this year. The benchmark Newcastle 6,000kcal/kg grade c ...
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- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Posco Energy - South Korea
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Global Coal Blending Company Limited - Australia
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Australian Coal Association
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- Coastal Gujarat Power Limited - India
- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- PowerSource Philippines DevCo
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- MS Steel International - UAE
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
- Economic Council, Georgia
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Makarim & Taira - Indonesia
- Romanian Commodities Exchange
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Indika Energy - Indonesia
- SMG Consultants - Indonesia
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- White Energy Company Limited
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
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