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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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- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Parry Sugars Refinery, India
- Australian Coal Association
- Planning Commission, India
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- The University of Queensland
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Parliament of New Zealand
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Samtan Co., Ltd - South Korea
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Latin American Coal - Colombia
- VISA Power Limited - India
- Cement Manufacturers Association - India
- GVK Power & Infra Limited - India
- Mercuria Energy - Indonesia
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Ministry of Mines - Canada
- Central Electricity Authority - India
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Marubeni Corporation - India
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
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