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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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- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- White Energy Company Limited
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- Chamber of Mines of South Africa
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- Renaissance Capital - South Africa
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Coal and Oil Company - UAE
- Binh Thuan Hamico - Vietnam
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Economic Council, Georgia
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Aboitiz Power Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Interocean Group of Companies - India
- IHS Mccloskey Coal Group - USA
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