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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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Friday, 13 August 21
INDONESIA’S COAL EXPORTS TO JAPAN DECLINED BY -26.3% YOY TO 11.9 MLN TONNES IN THE FIRST 7 MONTHS OF 2021; STILL THE SECOND LARGEST SOURCE FOR JAPAN’S COAL IMPORTS IS INDONESIA - BANCHERO COSTA
2020 proved to be a truly terrible year for global seaborne coal trade. Total global loadings in the 12 months of 2020 were down -12.7% year-on-yea ...
Thursday, 12 August 21
ONLY 3 VLCCS SOLD FOR DEMOLITION IN 2021 AS SECONDHAND PRICES TEMPT - BIMCO
During the first seven months of 2021, only three actively trading Very Large Crude Carriers (VLCCs) have been sold for demolition. The current mar ...
Wednesday, 11 August 21
U.S: EIA EXPECTS COAL EXPORTS TO TOTAL 90 MMST IN 2021, 30% INCREASE FROM 2020
Coal production in EIA's forecast totals 607 million short tons (MMst) in 2021, an increase of 13% over 2020.
EIA is also ...
Wednesday, 11 August 21
MARKET INSIGHT - INTERMODAL
Energy is at the core of the global climate dialogue as the climate challenge is essentially an energy challenge. Policy experts around the world a ...
Tuesday, 10 August 21
34 INDONESIAN COAL COMPANIES TEMPORARILY BANNED FOR COAL EXPORTS
The Ministry of Energy and Mineral Resources (ESDM) has imposed sanctions in the form of a coal export ban for 34 coal companies as reported by CNB ...
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- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- White Energy Company Limited
- VISA Power Limited - India
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Semirara Mining Corp, Philippines
- SMC Global Power, Philippines
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Ambuja Cements Ltd - India
- Planning Commission, India
- Cement Manufacturers Association - India
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Manunggal Multi Energi - Indonesia
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