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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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Wednesday, 12 May 21
U.S. COAL PRODUCTION TO INCREASE BY 43 MMST IN 2021 TOTAL 582 MILLION SHORT TONS - EIA
U.S. energy Information Administration expects U.S. coal production to total 582 million short tons (MMst) in 2021, 43 MMst (8%) more than in 2020. ...
Wednesday, 12 May 21
MARKET INSIGHT - INTERMODAL
Tanker S&P is finally back!
For an extended period, Dry bulk & Wet market rates have been diverging, with the SnP deals on each sect ...
Monday, 10 May 21
PAKISTAN: COAL GASIFICATION AND LIQUEFACTION HARMFUL TO ECONOMY - IEEFA
There is no second life for coal
Pakistan’s intention to use coal for power production through gasification and liquefaction technologie ...
Sunday, 09 May 21
HERE'S WHY INVESTORS ARE POURING MONEY INTO COAL, DESPITE ITS BLEAK FUTURE - FORBES
Coal stocks have surged this year – along with the wider energy sector – but experts warn these are likely short-term gains for an indu ...
Sunday, 09 May 21
MAYBANK TO STOP COAL FINANCING - BERNAMA
Malayan Banking Bhd (Maybank) will stop financing new coal activities as part of its sustainable agenda.
Currently, coal financing m ...
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- Indogreen Group - Indonesia
- MS Steel International - UAE
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
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- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Xindia Steels Limited - India
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Planning Commission, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Ministry of Transport, Egypt
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
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