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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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Monday, 31 October 22
U.S. COAL-FIRED GENERATION DECLINING AFTER BRIEF RISE LAST YEAR - EIA
We expect 6% less U.S. coal-fired generation in 2022 than in 2021, according to our latest Short-Term Energy Outlook (STEO). Although coal-fired ge ...
Monday, 31 October 22
CHINA COAL OUTPUT UP 12.3 PCT IN SEPTEMBER - XINHUA
China’s raw coal output posted stable expansion in September, official data showed.
The country produced 390 million tonnes of ...
Wednesday, 26 October 22
BIMCO PUBLISHES UPDATED GENCON CONTRACT
BIMCO has published a revised and updated version GENCON 2022 – one of its flagship contracts within its portfolio of standard contracts for ...
Monday, 24 October 22
KOSPO TO INVITE 400,000 MT OF COAL FOR 3 YEARS
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an international tender for 400,000 MT of 3,800 - 4,400kcal/kg NCV and Sulfur Max 0 ...
Wednesday, 19 October 22
ASIA COULD BE A BRIGHT SPOT AMID GLOBAL DOWNTURN NEXT YEAR, ECONOMISTS SAY - CNBC
Asia — especially Southeast Asia — remains a bright spot, even as the global economy looks set to head into recession next year, econom ...
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- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- The University of Queensland
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- ICICI Bank Limited - India
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Salva Resources Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Planning Commission, India
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- Parliament of New Zealand
- Larsen & Toubro Limited - India
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Marubeni Corporation - India
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