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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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Sunday, 11 July 21
COAL SHOWS ITS STAYING POWER AS ECONOMIES BOUNCE BACK - THE WALL STREET JOURNAL
Coal use is surging in some of the world’s largest economies as electricity demand rebounds from the pandemic, illustrating the challenges to ...
Sunday, 11 July 21
ROBUST CHINA COAL DEMAND AMID AUSTRALIA IMPORT BAN FUELS PRICE RALLY - REUTERS
Seaborne coal has become a quiet winner among energy commodities, lacking the attention of higher-profile crude oil and liquefied natural gas (LNG) ...
Saturday, 10 July 21
OVERESTIMATED LCOES OF COAL-FIRED POWER PLANTS CREATE A FINANCIAL BUBBLE - IEEFA
Massive stranded asset risk detrimentally affects the financial and power distribution
India’s future coal-fired power project pipeline ...
Friday, 09 July 21
EIA FORECASTS COAL’S GENERATION SHARE IN U.S TO RISE FROM 20% IN 2020 TO 24% THIS YEAR BUT TO FALL TO 22% NEXT YEAR
The July Short-Term Energy Outlook (STEO) of EIA remains subject to heightened levels of uncertainty related to the ongoing economic recovery from ...
Friday, 09 July 21
KOREA SOUTH-EAST POWER CO., LTD. INVITES BIDS FOR 1.86 MILLION TONS OF COAL OF 5600 & 4000 NCV COAL FOR THREE YEARS
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 280,000 – 300,000 MT of Min. ...
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- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- VISA Power Limited - India
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Sojitz Corporation - Japan
- Sakthi Sugars Limited - India
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Parry Sugars Refinery, India
- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- White Energy Company Limited
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- Deloitte Consulting - India
- Oldendorff Carriers - Singapore
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Energy Development Corp, Philippines
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
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