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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, 18 August 20
BLACKBALLED: WILL COAL BOUNCE BACK FROM SLUMP OR IS IT TERMINAL? - SYDNEY MORNING HERALD
Even by the standards of this miserable year, 2020 has been a shocker for the global coal industry.
As the lockdown kicked in demand ...
Friday, 14 August 20
EIA: COAL PLANTS UNECONOMICAL IN MOST REGIONS - IEEFA
U.S. coal power generation plunged by 30 percent in the first half of 2020 off an already-depressed base, shoved out by natural gas and renewables ...
Thursday, 13 August 20
INDIA SHOULD RECORD A SLIGHT DECREASE IN THERMAL COAL IMPORTS, REACHING A VOLUME OF 167 MILLION TONS BY THE END OF 2020 - ASSOCARBONI
Regarding 2020 thermal coal imports forecasts, Vietnam’s coal imports showed a very strong growth in the first half of 2020 and it is believe ...
Thursday, 13 August 20
INDONESIA REMAINS THE LARGEST EXPORTER OF COAL IN THE WORLD - ASSOCARBONI
According to the last Assocarboni data for 2019, Indonesia remains the largest exporter in the world. Thermal coal exports have in fact reached 456 ...
Wednesday, 12 August 20
VIETNAM WAS THE PROTAGONIST OF A SIGNIFICANT INCREASE IN COAL IMPORTS IN 2019 - ASSOCARBONI
The latest Assocarboni data for 2019 also provide a detailed picture on the trend of the global coal import.
According to Assocarbon ...
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- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- Marubeni Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- Star Paper Mills Limited - India
- Planning Commission, India
- Dalmia Cement Bharat India
- The University of Queensland
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Jorong Barutama Greston.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Sojitz Corporation - Japan
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- Indonesian Coal Mining Association
- White Energy Company Limited
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- Bukit Makmur.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
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