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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, 26 October 21
CHINA'S COAL-RICH SHANXI BEEFS UP COAL PRODUCTION - XINHUA
Major coal producers in north China’s Shanxi Province, a leading coal-producing region of the country, have beefed up production to ensure en ...
Tuesday, 26 October 21
ENERGY CRISIS SHOWS COAL IS AN EXPENSIVE AND UNRELIABLE SOURCE OF ELECTRICITY GENERATION - IEEFA
Any knee-jerk reaction that urges more investment in coal completely misses the point
India is teetering on the brink of joining a growing glo ...
Tuesday, 26 October 21
CHINA TO INVESTIGATE ENERGY INDEX PROVIDERS IN BID TO TAME COAL PRICES - REUTERS
China said on Monday it will investigate energy price index providers as it urged coal industry participants to “strictly” meet contrac ...
Tuesday, 26 October 21
THERE IS PLENTY OF COAL AND GAS IN THE WORLD BUT A VOLATILE MARKET IS NOBODY'S FRIEND - IEEFA
Gas will be winding its way out of the energy system
Gas prices are continuing to surge around the world. The cost of gas is at unpr ...
Tuesday, 26 October 21
AUSTRALIA EXPORTED 51.6 MLN TONNES OF COAL TO INDIA IN FIRST 10 MONTHS, 19% OF ALL AUSTRALIAN COAL EXPORTS; CHINA WAS THE DESTINATION FOR JUST 0.7% - BANCHERO COSTA
2020 proved to be a truly terrible year for global seaborne coal trade. In 2021 things started pretty badly, but we are seeing increasing signs of ...
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- Central Java Power - Indonesia
- Trasteel International SA, Italy
- Planning Commission, India
- Petrochimia International Co. Ltd.- Taiwan
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- GN Power Mariveles Coal Plant, Philippines
- Kalimantan Lumbung Energi - Indonesia
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Thiess Contractors Indonesia
- European Bulk Services B.V. - Netherlands
- Ministry of Mines - Canada
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- PTC India Limited - India
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Posco Energy - South Korea
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Meralco Power Generation, Philippines
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- Australian Coal Association
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Attock Cement Pakistan Limited
- GAC Shipping (India) Pvt Ltd
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Star Paper Mills Limited - India
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- The University of Queensland
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
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