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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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Thursday, 07 January 21
FITCH FORECASTS DOUBLING IN ASIAN WIND, SOLAR CAPACITY BY 2029, TOPPING 1,500GW
Despite some near-term delays due to the Covid-19 pandemic, solar power and offshore wind will drive steep growth in non-hydro renewables in Asia, ...
Wednesday, 06 January 21
INDONESIA EXCEEDS COAL PRODUCTION TARGET IN 2020
Indonesian coal production reached 557.54 Million Tons in 2020 1.37% higher than of last year’s total target of 550.00 Million Tons, accordin ...
Wednesday, 06 January 21
CHINESE CITIES REPORTEDLY GO DARK AS COUNTRY FACES SHORTAGE OF COAL, A MAJOR AUSTRALIAN EXPORT - CNBC
Several major Chinese cities have reportedly gone dark as authorities limit power usage, citing a shortage of coal.
Analysts said pr ...
Tuesday, 05 January 21
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP - XINHUA
China Taiyuan coal transaction price index stood at 136 points Monday, up 0.91 percent week on week.
The index, released by China Ta ...
Tuesday, 05 January 21
THE INDONESIA COAL PRICE REFERENCE SOARS TO HIGHEST ONE-MONTH INCREASE SINCE DECEMBER 2016
COALspot.com: The Indonesia coal price reference for January 2021 settles above $75 for the first time since July 2019 and to highest one-month inc ...
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- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- White Energy Company Limited
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Grasim Industreis Ltd - India
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Planning Commission, India
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Thiess Contractors Indonesia
- Uttam Galva Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- Ministry of Finance - Indonesia
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Trasteel International SA, Italy
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parliament of New Zealand
- Marubeni Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- Indika Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- LBH Netherlands Bv - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tamil Nadu electricity Board
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
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