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