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