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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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Tuesday, 07 December 21
COAL FIRMS SEE SHARE PRICES SURGE MONDAY, AFTER GOVERNMENT READJUSTS CONTRACT PRICES - GLOBAL TIMES
Share prices of China’s coal enterprises jumped on Monday on the A-share market following a nationwide adjustment to annual thermal coal pric ...
Monday, 06 December 21
CHINA SETS 2022 ANNUAL THERMAL COAL PRICES AT 700 YUAN/T - MEDIA: REUTERS
China’s top economic planner has proposed to set annual thermal coal prices for 2022 at between 550 yuan and 850 yuan ($86-$133) per tonne, a ...
Thursday, 02 December 21
BUMI RECORDED US$ 666.18 MILLION AS REVENUE IN THE 3RD QUARTER, UP 13.31% YOY
PT Bumi Resources Tbk and its subsidiaries have recorded a surge in revenue in the third quarter of 2021. BUMI has recorded US$ 666.18 million as r ...
Thursday, 02 December 21
CHINA'S COAL CRUNCH IS OVER, BUT PRICES ARE STILL TOO HIGH - REUTERS
China’s coal crisis has largely been resolved with gains in both production and stockpiles sufficient to ensure power supplies over winter.
...
Wednesday, 01 December 21
2022 OUTLOOK: INDONESIAN COAL MINING - FITCH RATINGS
Fitch Ratings has a neutral outlook on the Indonesian coal sector for 2022.
Earnings generation should slow down as selling pr ...
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- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Jorong Barutama Greston.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- Planning Commission, India
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Australian Coal Association
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Siam City Cement - Thailand
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Interocean Group of Companies - India
- Ministry of Transport, Egypt
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Wood Mackenzie - Singapore
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- The University of Queensland
- Indika Energy - Indonesia
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Africa Commodities Group - South Africa
- Central Electricity Authority - India
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