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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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Tuesday, 22 December 20
INDIA'S COAL DEMAND IS SET TO EXPAND DESPITE PLUMMETING IN 2020 - IEA
Coal consumption in India amounted to 979 Mt in 2019, with the largest share being thermal coal (including lignite) for electricity generation (687 ...
Tuesday, 22 December 20
SOUTHEAST ASIA'S COAL DEMAND IS SET TO EXPAND AFTER THE PANDEMIC-INDUCED HIATUS IN 2020 - IEA
Coal consumption in Southeast Asia has more than doubled in the last decade, with the largest growth in Indonesia and Viet Nam, followed by Malaysi ...
Tuesday, 22 December 20
COAL DEMAND IS RISING QUICKLY IN PAKISTAN AND MORE SLOWLY IN BANGLADESH - IEA
Pakistan had 150 MW of installed coal power capacity in 2015. Since 2017, in addition to a few small plants for industry, Pakistan has commissioned ...
Tuesday, 22 December 20
AFRICA PERSPECTIVE INDICATES NO MAJOR SHIFTS FOR COAL CONSUMPTION - IEA
Overall countries on the African continent consumed 197 Mt of coal in 2019, 12 Mt less (-6%) than 2018.
South Africa, the continent& ...
Monday, 21 December 20
COAL PRICES WITHSTAND DESPITE COVID-19 AND CHINESE IMPORT QUOTAS - IEA
Coal prices vary by region as well as by grade and quality. The price rebound starting in 2016 ended in 2018, moving in a downward trend in 2019. A ...
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- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
- Siam City Cement - Thailand
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- Australian Coal Association
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Ambuja Cements Ltd - India
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Romanian Commodities Exchange
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- ICICI Bank Limited - India
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Mercator Lines Limited - India
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
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