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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, 25 August 20
INDIA'S IMPORTS FALL AS LOCKDOWNS IMPACT THE POWER AND INDUSTRIAL SECTORS - REPORT
India is the world’s second largest thermal coal consumer and importer, importing an estimated 211 million tonnes of thermal coal in 2019.&nb ...
Monday, 24 August 20
A COMBINATION OF DEVELOPMENTS DROVE THE FALLOFF COAL PRICES - CHIEF ECONOMIST’ OFFICE, AUSTRALIA
China, rising domestic production combined with subdued power demand;
India, a lockdown coupled with government directives that fav ...
Monday, 24 August 20
AUSTRALIA'S THERMAL COAL EXPORTS ARE FORECAST TO DROP FROM AN ESTIMATED $20 BILLION IN 2019-20 TO $16 BILLION IN 2020-21: REPORT
Thermal coal spot prices have fallen sharply as the impact of COVID-19 drives a contraction in seaborne trade for only the second time this century ...
Saturday, 22 August 20
REPORT SEES INDIA’S RELIANCE ON THERMAL POWER DROPPING TO 50% IN 2021, 43% IN 2026 - ET ENERGY | IEEFA
India’s dependence on thermal power will reduce to 50 per cent by 2021-22 and 43 per cent by 2026-27 on the back of renewable energy (RE) cap ...
Friday, 21 August 20
323 MILLION ELECTRIC VEHICLES WILL BE ON THE ROADS BY 2040 - WOOD MACKENZIE
Electric vehicle (EV) sales are expected to reach 45 million units per year by 2040, with a total global EV stock of 323 million, according to new ...
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- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
- PTC India Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Economic Council, Georgia
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Straits Asia Resources Limited - Singapore
- SMC Global Power, Philippines
- Wood Mackenzie - Singapore
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- London Commodity Brokers - England
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Thai Mozambique Logistica
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
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