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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, 27 August 20
BANGLADESH POWER MINISTRY SEEKING AUTHORITY TO CANCEL 13,000 MW OF PROPOSED COAL-FIRED CAPACITY - BUSINESS STANDARD
In a bid to move away from dirty energy, the Ministry of Power, Energy and Mineral Resources is seeking the prime minister’s approval to conv ...
Wednesday, 26 August 20
ASIAN COAL PRICES LIKELY TO REMAIN DEPRESSED SAY TRADERS, ANALYSTS - REUTERS
Asian coal prices, which have fallen around 25% this year as power demand slumped due to the coronavirus outbreak, are unlikely to move higher befo ...
Wednesday, 26 August 20
WORLD COAL EXPORTS: INDONESIAN THERMAL COAL EXPORTS HAVE COME UNDER PRESSURE AS THERMAL COAL PRICES WEAKEN - REPORT
Indonesia’s exports to decline sharply from record highs
Indonesia is the world’s largest thermal coal exporter, sellin ...
Wednesday, 26 August 20
JAPAN'S COAL IMPORTS ARE BEING AFFECTED BY COMPETING INFLUENCES - REPORT
Japan is the world’s third largest thermal coal importer, importing an estimated 135 million tonnes of thermal coal in 2019. The country&rsqu ...
Wednesday, 26 August 20
PENDING SOUTH KOREA LEGISLATION COULD FORCE HALT TO COUNTRY’S COAL PLANT EXPORT DEALS - KOREA ECONOMIC DAILY
South Korea’s parliament looks set to pass new legislation to ban financing on foreign coal power projects, putting all overseas coal-fired p ...
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- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Trasteel International SA, Italy
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Aditya Birla Group - India
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Latin American Coal - Colombia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Port Waratah Coal Services - Australia
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- PTC India Limited - India
- Sical Logistics Limited - India
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Baramulti Group, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- MS Steel International - UAE
- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- Oldendorff Carriers - Singapore
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Marubeni Corporation - India
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Bangladesh Power Developement Board
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Kideco Jaya Agung - Indonesia
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- Maheswari Brothers Coal Limited - India
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
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