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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, 14 April 21
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 1.10 PCT - XINHUA
China Taiyuan coal transaction price index stood at 138.05 points Monday, down 1.10 percent week on week.
The index, released by Chi ...
Wednesday, 14 April 21
MARKET INSIGHT - INTERMODAL
After a series of months where the dry bulk sector was attracting most of the buying interest, tankers SnP activity spiked in the previous weeks. O ...
Tuesday, 13 April 21
INDONESIAN COAL PRICE REFERENCE IN APRIL UP AGAIN ON FIRM DEMAND
COALspot.com: The Indonesia coal price reference for April 2021 settles at US$ 86.68 per ton FOB vessel.
The Indonesia coal pr ...
Monday, 12 April 21
CHINA'S ECONOMIC RECOVERY PUSHES COAL MINES TO INCREASE YIELD - GLOBAL TIMES
China’s fast economic rebound from coronavirus has driven up electricity demand, leading to higher consumption of coal which is seeing rising ...
Monday, 12 April 21
GLOBAL COAL PRODUCTION EXPECTED TO RISE BY 3.5% IN 2021, SAYS GLOBALDATA
Global coal output is estimated to have declined by 2% in 2020 due to COVID-19-related lockdowns and restrictions, with significant reductions obse ...
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- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Standard Chartered Bank - UAE
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Economic Council, Georgia
- Xindia Steels Limited - India
- CNBM International Corporation - China
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Indonesian Coal Mining Association
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- Ministry of Transport, Egypt
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- Australian Coal Association
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Aboitiz Power Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Essar Steel Hazira Ltd - India
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Coastal Gujarat Power Limited - India
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
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