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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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- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- Billiton Holdings Pty Ltd - Australia
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- Malabar Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Interocean Group of Companies - India
- Australian Coal Association
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- The Treasury - Australian Government
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- London Commodity Brokers - England
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- PTC India Limited - India
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Planning Commission, India
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Posco Energy - South Korea
- PNOC Exploration Corporation - Philippines
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- Economic Council, Georgia
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Baiduri Energy - Indonesia
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