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