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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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Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
Wednesday, 31 January 24
GAS EXPORTS COST U.S. CONSUMERS MORE THAN $100 BILLION OVER 16-MONTH PERIOD - IEEFA
Limited Demand Growth Could Dampen the Dry Bulk Market in the Coming Months BIMCOStarting in late 2021—before its invasion of Ukraine—R ...
Tuesday, 30 January 24
LIMITED DEMAND GROWTH COULD DAMPEN THE DRY BULK MARKET IN THE COMING MONTHS - BIMCO
Demand
In our base scenario, we expect cargo demand to grow by 0-1% in 2024 and 0.5-1.5% in 2025. This is a 0.5 percentage point reduction for ...
Friday, 26 January 24
RED SEA DIVERSIONS ADD NEARLY A MILLION DOLLARS PER VOYAGE TO SHIPPING COSTS WHILE DOUBLING TRANSIT TIME - LSEG
The incremental costs of diverting a tanker from Asia to NW Europe via the Cape of Good Hope is accounting for an extra $932,905 USD per voyage whi ...
Friday, 26 January 24
HARD COAL GUARDIAN ANGEL OF THE ENERGY SUPPLY - GERMANY COAL IMPORTERS ASSOCIATION
- No security of supply without hard coal
- The Substitute Power Plant Provision Act (EKBG) must be extended
- Higher grid fees due to the ...
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- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- GMR Energy Limited - India
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- Karbindo Abesyapradhi - Indoneisa
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- The University of Queensland
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- White Energy Company Limited
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
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