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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, 07 January 21
FITCH FORECASTS DOUBLING IN ASIAN WIND, SOLAR CAPACITY BY 2029, TOPPING 1,500GW
Despite some near-term delays due to the Covid-19 pandemic, solar power and offshore wind will drive steep growth in non-hydro renewables in Asia, ...
Wednesday, 06 January 21
INDONESIA EXCEEDS COAL PRODUCTION TARGET IN 2020
Indonesian coal production reached 557.54 Million Tons in 2020 1.37% higher than of last year’s total target of 550.00 Million Tons, accordin ...
Wednesday, 06 January 21
CHINESE CITIES REPORTEDLY GO DARK AS COUNTRY FACES SHORTAGE OF COAL, A MAJOR AUSTRALIAN EXPORT - CNBC
Several major Chinese cities have reportedly gone dark as authorities limit power usage, citing a shortage of coal.
Analysts said pr ...
Tuesday, 05 January 21
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP - XINHUA
China Taiyuan coal transaction price index stood at 136 points Monday, up 0.91 percent week on week.
The index, released by China Ta ...
Tuesday, 05 January 21
THE INDONESIA COAL PRICE REFERENCE SOARS TO HIGHEST ONE-MONTH INCREASE SINCE DECEMBER 2016
COALspot.com: The Indonesia coal price reference for January 2021 settles above $75 for the first time since July 2019 and to highest one-month inc ...
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- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- Mercator Lines Limited - India
- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- Posco Energy - South Korea
- Iligan Light & Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- Malabar Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- Antam Resourcindo - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
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- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- SMC Global Power, Philippines
- White Energy Company Limited
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- CIMB Investment Bank - Malaysia
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Australian Coal Association
- Latin American Coal - Colombia
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Larsen & Toubro Limited - India
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Energy Link Ltd, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Intertek Mineral Services - Indonesia
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