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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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Saturday, 16 October 21
DESPITE HIGHER COAL PRICES, U.S. COAL RECOVERY LOOKS WEAK BY MOST MEASURES - IEEFA
U.S. coal sector is locked into a long-term sectoral decline
Coal prices have surged to the highest level in years in the U.S., and have soare ...
Saturday, 16 October 21
COAL IS 'KING' AS GAS PRICES SOAR, TOTAL CEO SAYS - AND IT’S BACKFIRING ON CLEANER ENERGY GOALS - CNBC
Surging natural gas prices have led to a jump in coal use, with plants in Europe and Asia firing back up as temperatures decline and the world grap ...
Saturday, 16 October 21
VIETNAM'S COAL-FIRED POWER MAY DOUBLE BY 2030 UNDER DRAFT ENERGY PLAN - REUTERS
Vietnam may double the amount of coal-fired electric generation it installs by 2030 under a draft power development plan submitted to the prime min ...
Friday, 15 October 21
AUSTRALIA'S WHITEHAVEN EXPECTS TO BE DEBT-FREE NEXT YEAR AS COAL PRICES SOAR - REUTERS
Australia’s Whitehaven Coal WHC.AX said on Thursday it expects to be debt-free by early 2022, as thermal coal prices surge to record highs on ...
Friday, 15 October 21
WINTER CHILL KEEPS CHINA'S COAL PRICES HIGH, POWER CRUNCH STOKES INFLATION - REUTERS
China coal prices held near record highs on Thursday as cold weather swept into the country’s north and power plants stocked up on the fuel t ...
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- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Bangladesh Power Developement Board
- Planning Commission, India
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- Ambuja Cements Ltd - India
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Central Electricity Authority - India
- Trasteel International SA, Italy
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- Bhatia International Limited - India
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Economic Council, Georgia
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Australian Coal Association
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Thai Mozambique Logistica
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
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