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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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Thursday, 10 June 21
INDONESIA COAL EARNINGS RECOVERY TO SLOW AFTER STRONG 1Q - FITCH RATINGS
Fitch Ratings expects the recovery in operating and financial performance of Indonesian coal miners and coal contractors to slow during rest of 202 ...
Thursday, 10 June 21
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EIA expects U.S. coal production to total 600 million short tons (MMst) in 2021, which is 61 MMst (11%) more than in 2020.
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Saturday, 05 June 21
KOMIPO INVITED 5600 NAR COAL OFFERS FOR THREE YEARS SUPPLY; 520,000 MT PER YEAR
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- London Commodity Brokers - England
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- Electricity Generating Authority of Thailand
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
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- Bangladesh Power Developement Board
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- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
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- Indogreen Group - Indonesia
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- Asia Pacific Energy Resources Ventures Inc, Philippines
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- The Treasury - Australian Government
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- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
- CNBM International Corporation - China
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
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- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
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- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
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- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Parry Sugars Refinery, India
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- LBH Netherlands Bv - Netherlands
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- Indika Energy - Indonesia
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- Gujarat Sidhee Cement - India
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- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
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- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
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- Electricity Authority, New Zealand
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- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
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- Bharathi Cement Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
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- GN Power Mariveles Coal Plant, Philippines
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
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- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- Meenaskhi Energy Private Limited - India
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Minerals Council of Australia
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Marubeni Corporation - India
- India Bulls Power Limited - India
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Deloitte Consulting - India
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- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
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- Sindya Power Generating Company Private Ltd
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- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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