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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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Wednesday, 05 January 22
CHINA COAL FUTURES SURGE ON SUPPLY WORRIES AMID INDONESIA EXPORT BAN - REUTERS
China’s thermal coal futures surged by as much as 7.8per cent to kick off 2022 on concerns of supply disruptions after Indonesia, its biggest ...
Wednesday, 05 January 22
INDONESIA WARNS COAL SUPPLY CRUNCH NOT OVER AS CHINA PRICES RALLY - REUTERS
Indonesia has warned that its coal supply situation remains critical, ahead of Wednesday’s (Jan 5) review of its export ban, unnerving global ...
Tuesday, 28 December 21
INDIA'S ADANI NEARS FIRST COAL SHIPMENT FROM SHUNNED AUSTRALIAN MINE - REUTERS
India’s Adani Group ADEL.NS is preparing to ship the first coal cargo from Australia’s most controversial mine, after battling a seven- ...
Thursday, 23 December 21
COAL TO STAY AS MAJOR SOURCE OF ENERGY IN FORESEEABLE FUTURE: JOSHI - BUSINESS STANDARD
Coal will stay as a major source of energy in the foreseeable future as it is an affordable source of energy with substantial reserve, Parliament w ...
Thursday, 23 December 21
ANNUAL U.S. COAL-FIRED ELECTRICITY GENERATION WILL INCREASE FOR THE FIRST TIME SINCE 2014 - EIA
From December 20 through December 30, Today in Energy will feature some of our favorite articles from 2021. Today’s article was originally pu ...
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- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- The University of Queensland
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- McConnell Dowell - Australia
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- Videocon Industries ltd - India
- Siam City Cement PLC, Thailand
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- Siam City Cement - Thailand
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Tamil Nadu electricity Board
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Mercuria Energy - Indonesia
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- White Energy Company Limited
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Coal and Oil Company - UAE
- PTC India Limited - India
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Eastern Coal Council - USA
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
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