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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, 07 October 20
U.S. COAL PRODUCTION TO DECREASE BY 26 PERCENT IN 2020 COMPARED TO 2019 - EIA
EIA expects total U.S. coal production in 2020 to be 525 million short tons (MMst), compared with 705 MMst in 2019, a 26% decrease.
COVID-19 a ...
Wednesday, 07 October 20
MARKET INSIGHT - INTERMODAL
The challenges brought forward in 2020 proved to be very different from what we could have ever imagined. Together with placing a significant strai ...
Tuesday, 06 October 20
KOSPO TO IMPORT 80,000 MT OF 3,800 NCV COAL FOR 2H NOV
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 MT Min.3800 kcal/kg NCV coal 2H November, 2020 l ...
Friday, 02 October 20
THE INDONESIA COAL PRICE REFERENCE RISE AFTER HISTORIC CRASH TO US$ 49.42
COALspot.com: The Indonesia Coal Price Reference for the month of October Rise to US$ 51.00 after historic crash to US$ 49.42 in September 2020.
...
Friday, 02 October 20
SRI LANKA MUST LEARN LESSONS FROM AROUND ASIA TO AVOID FURTHER ELECTRICITY CRISES - IEEFA
Overcommitment to fossil-fuelled power generation is leading to excess capacity and rising capacity payments, subsidies, and tariffs around the con ...
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- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Planning Commission, India
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Minerals Council of Australia
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Africa Commodities Group - South Africa
- CNBM International Corporation - China
- Central Electricity Authority - India
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Price Waterhouse Coopers - Russia
- Gujarat Sidhee Cement - India
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Posco Energy - South Korea
- Mjunction Services Limited - India
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Wood Mackenzie - Singapore
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- Indonesian Coal Mining Association
- PTC India Limited - India
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Salva Resources Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Indian Oil Corporation Limited
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Central Java Power - Indonesia
- Eastern Coal Council - USA
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
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