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