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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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Monday, 11 October 21
COAL ABANDONMENT IN POWER GENERATION PROMOTED GAS DEMAND GROWTH IN EUROPE - TOP MANAGER: TASS
Accelerated abandonment of coal in power generation and the overall recovery of economic activity facilitated gas demand growth in Europe and led t ...
Saturday, 09 October 21
CHINA POWER CUTS: COAL MINERS ORDERED TO BOOST OUTPUT, SAY REPORTS - BBC
Beijing has reportedly ordered China’s coal mines to boost output as an energy shortage across the country has seen millions of homes and bus ...
Friday, 08 October 21
SEPTEMBER CRUDE OIL TANKER DEMOLISHING HITS 39-MONTHS HIGH AT 1.9M DWT - PETER SAND
Has the lid finally come off for crude oil tanker demolition in 2021? If judged by the 1.9m DWT of capacity that was removed in September, the answ ...
Friday, 08 October 21
COAL SHORTAGE MAY LEAD TO RISE IN STEEL PRICES IN COMING MONTHS: JSPL MD - PTI
Steel prices are expected to increase in the coming months as companies are buying coal at three times the rates a month ago, said a top industry e ...
Wednesday, 06 October 21
INDONESIA COAL PRICE REFERENCE: ANOTHER MONTH, ANOTHER RALLY
COALspot.com: Indonesian Coal Price Reference in a steep climb for most of second and third quarters of 2021 as it reached a pinnacle of $161.63 Oc ...
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- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Trasteel International SA, Italy
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- London Commodity Brokers - England
- Cement Manufacturers Association - India
- Malabar Cements Ltd - India
- Bharathi Cement Corporation - India
- PTC India Limited - India
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- Indonesian Coal Mining Association
- IHS Mccloskey Coal Group - USA
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Cigading International Bulk Terminal - Indonesia
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Parliament of New Zealand
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- Siam City Cement PLC, Thailand
- LBH Netherlands Bv - Netherlands
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- The University of Queensland
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Mercuria Energy - Indonesia
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Indian Oil Corporation Limited
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