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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, 16 November 21
INDONESIA’S 2022 COAL USE FOR POWER GENERATION SET TO RISE 3% - REUTERS
Indonesia’s coal consumption for power generation is likely to rise by 3.1% next year compared to 2021, the head of the country’s state ...
Tuesday, 16 November 21
CHINA'S MONTHLY COAL OUTPUT RISES TO HIGHEST SINCE MARCH 2015 - REUTERS
China’s October coal output rose to the highest since at least March 2015, after Beijing approved a raft of coal mine expansions to tame reco ...
Friday, 12 November 21
RUSSIA-INDIA COKING COAL DEAL UNLIKELY TO IMPACT PANAMAX SHIPPING - DREWRY
Russia and India have recently entered into an agreement whereby Russia will supply up to 40 million tonnes of coking coal to India every year. Dre ...
Friday, 12 November 21
ASIA COAL POWER PIPELINE TO SHRINK BY TWO THIRDS AFTER CHINA FINANCE CUT - REUTERS
Asia’s pipeline of proposed coal-fired power plants is expected to shrink from 65 gigawatts to 22 gigawatts following China’s pledge to ...
Friday, 12 November 21
INDONESIAN COAL PRICE REFERENCE TOPS $215 A TON; THE HIGHEST COAL PRICE IN HISTORY
COALspot.com: Indonesian Coal Price Reference in a steep climb for most of second half of 2021 as it reached a pinnacle of $215.01 in November 2021 ...
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- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- PTC India Limited - India
- Indian Oil Corporation Limited
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- VISA Power Limited - India
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Posco Energy - South Korea
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- Sical Logistics Limited - India
- OPG Power Generation Pvt Ltd - India
- GMR Energy Limited - India
- The Treasury - Australian Government
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- London Commodity Brokers - England
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Xindia Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Minerals Council of Australia
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Parry Sugars Refinery, India
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
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