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