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