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