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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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Saturday, 17 July 21
COAL PRICES TRADE AT DECADE HIGH OF $140 PER TONNE, HERE ARE SOME FACTORS AT PLAY: CNBC-TV18
Coal prices are trading at $140 per tonne. In the last one week, coal has seen more than 8 percent gains; the last one month has seen 24 percent ju ...
Thursday, 15 July 21
U.S. FOSSIL FUEL CONSUMPTION FELL BY 9% IN 2020, THE LOWEST LEVEL IN NEARLY 30 YEARS - EIA
U.S. fossil fuel consumption fell by 9% in 2020, the lowest level in nearly 30 years
In 2020, total consumption of fossil fuels in t ...
Thursday, 15 July 21
IN 2020, U.S. COAL PRODUCTION FELL TO ITS LOWEST LEVEL SINCE 1965 - EIA
U.S. coal production totaled 535 million short tons (MMst) in 2020, a 24% decrease from the 706 MMst mined in 2019 and the lowest level of coal pro ...
Wednesday, 14 July 21
MARKET INSIGHT - INTERMODAL
In its latest Global Economic Prospects report, the world bank recorded the strongest post-recession global growth in 80 years, but emerging and de ...
Tuesday, 13 July 21
JAPAN STILL SEEKING TO EXPLOIT COAL POWER LOOPHOLES - IEEFA
JBIC wants to continue burdening developing nations with its expensive coal-fired power technology
Japan is continuing to push its expensive c ...
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- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- GMR Energy Limited - India
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Parliament of New Zealand
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Alfred C Toepfer International GmbH - Germany
- European Bulk Services B.V. - Netherlands
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Deloitte Consulting - India
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- Port Waratah Coal Services - Australia
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- Independent Power Producers Association of India
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Agrawal Coal Company - India
- Larsen & Toubro Limited - India
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Georgia Ports Authority, United States
- PTC India Limited - India
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Jorong Barutama Greston.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
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