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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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Wednesday, 12 May 21
U.S. COAL PRODUCTION TO INCREASE BY 43 MMST IN 2021 TOTAL 582 MILLION SHORT TONS - EIA
U.S. energy Information Administration expects U.S. coal production to total 582 million short tons (MMst) in 2021, 43 MMst (8%) more than in 2020. ...
Wednesday, 12 May 21
MARKET INSIGHT - INTERMODAL
Tanker S&P is finally back!
For an extended period, Dry bulk & Wet market rates have been diverging, with the SnP deals on each sect ...
Monday, 10 May 21
PAKISTAN: COAL GASIFICATION AND LIQUEFACTION HARMFUL TO ECONOMY - IEEFA
There is no second life for coal
Pakistan’s intention to use coal for power production through gasification and liquefaction technologie ...
Sunday, 09 May 21
HERE'S WHY INVESTORS ARE POURING MONEY INTO COAL, DESPITE ITS BLEAK FUTURE - FORBES
Coal stocks have surged this year – along with the wider energy sector – but experts warn these are likely short-term gains for an indu ...
Sunday, 09 May 21
MAYBANK TO STOP COAL FINANCING - BERNAMA
Malayan Banking Bhd (Maybank) will stop financing new coal activities as part of its sustainable agenda.
Currently, coal financing m ...
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- PNOC Exploration Corporation - Philippines
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- Wilmar Investment Holdings
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Planning Commission, India
- Baramulti Group, Indonesia
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Renaissance Capital - South Africa
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Trasteel International SA, Italy
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Parliament of New Zealand
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
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