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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, 09 August 21
AIIB MAY OFFICIALLY END COAL FINANCING IN 2022 - CHINA DAILY
The Asian Infrastructure Investment Bank may officially rule out coal projects if it updates its energy strategy next year, after shunning funding ...
Monday, 09 August 21
CHINA COAL INVENTORY THINS AMID PEAK POWER DEMAND- STATE MEDIA : REUTERS
China’s coal inventories have dropped to near historic lows since August due to peak summer electricity demand and transportation bottlenecks ...
Wednesday, 04 August 21
THE INDONESIAN COAL PRICE REFERENCE SURGED TO A FRESH RECORD HIGH OF USD 130.99 A TON IN AUGUST 2021
COALspot.com: The Indonesian Coal Price Reference ( HBA) surged to a fresh record high of USD 130.99 a ton in August 2021.
The ...
Wednesday, 04 August 21
MARKET INSIGHT - INTERMODAL
Unlike the Dry Bulk and Container sectors where freight rates have surged into 2021, the tankers market continues to experience lackluster earnings ...
Sunday, 01 August 21
SEABORNE HARD COAL TRADE IN 2020 DECREASED BY 149 MILLION MT, OR 12.1%, TO 1,083 MILLION MT - GERMAN COAL IMPORTERS ASSOCIATION
- Reduced coal-fired power plant fleet secures Germany’s power supply in severe winter of 2020/2021; little wind availability and hence stron ...
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- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- ICICI Bank Limited - India
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- The University of Queensland
- Singapore Mercantile Exchange
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Ministry of Mines - Canada
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Australian Coal Association
- Thai Mozambique Logistica
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Banpu Public Company Limited - Thailand
- Jaiprakash Power Ventures ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- Wood Mackenzie - Singapore
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- PTC India Limited - India
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Parliament of New Zealand
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Indian Oil Corporation Limited
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
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