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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, 14 April 21
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 1.10 PCT - XINHUA
China Taiyuan coal transaction price index stood at 138.05 points Monday, down 1.10 percent week on week.
The index, released by Chi ...
Wednesday, 14 April 21
MARKET INSIGHT - INTERMODAL
After a series of months where the dry bulk sector was attracting most of the buying interest, tankers SnP activity spiked in the previous weeks. O ...
Tuesday, 13 April 21
INDONESIAN COAL PRICE REFERENCE IN APRIL UP AGAIN ON FIRM DEMAND
COALspot.com: The Indonesia coal price reference for April 2021 settles at US$ 86.68 per ton FOB vessel.
The Indonesia coal pr ...
Monday, 12 April 21
CHINA'S ECONOMIC RECOVERY PUSHES COAL MINES TO INCREASE YIELD - GLOBAL TIMES
China’s fast economic rebound from coronavirus has driven up electricity demand, leading to higher consumption of coal which is seeing rising ...
Monday, 12 April 21
GLOBAL COAL PRODUCTION EXPECTED TO RISE BY 3.5% IN 2021, SAYS GLOBALDATA
Global coal output is estimated to have declined by 2% in 2020 due to COVID-19-related lockdowns and restrictions, with significant reductions obse ...
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- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Parliament of New Zealand
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- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
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- MS Steel International - UAE
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
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- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- The Treasury - Australian Government
- Energy Development Corp, Philippines
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- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- Gujarat Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Bhatia International Limited - India
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Bhushan Steel Limited - India
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- San Jose City I Power Corp, Philippines
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