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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, 07 October 20
U.S. COAL PRODUCTION TO DECREASE BY 26 PERCENT IN 2020 COMPARED TO 2019 - EIA
EIA expects total U.S. coal production in 2020 to be 525 million short tons (MMst), compared with 705 MMst in 2019, a 26% decrease.
COVID-19 a ...
Wednesday, 07 October 20
MARKET INSIGHT - INTERMODAL
The challenges brought forward in 2020 proved to be very different from what we could have ever imagined. Together with placing a significant strai ...
Tuesday, 06 October 20
KOSPO TO IMPORT 80,000 MT OF 3,800 NCV COAL FOR 2H NOV
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 MT Min.3800 kcal/kg NCV coal 2H November, 2020 l ...
Friday, 02 October 20
THE INDONESIA COAL PRICE REFERENCE RISE AFTER HISTORIC CRASH TO US$ 49.42
COALspot.com: The Indonesia Coal Price Reference for the month of October Rise to US$ 51.00 after historic crash to US$ 49.42 in September 2020.
...
Friday, 02 October 20
SRI LANKA MUST LEARN LESSONS FROM AROUND ASIA TO AVOID FURTHER ELECTRICITY CRISES - IEEFA
Overcommitment to fossil-fuelled power generation is leading to excess capacity and rising capacity payments, subsidies, and tariffs around the con ...
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- MS Steel International - UAE
- GVK Power & Infra Limited - India
- Aditya Birla Group - India
- Samtan Co., Ltd - South Korea
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Energy Link Ltd, New Zealand
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- Timah Investasi Mineral - Indoneisa
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Global Green Power PLC Corporation, Philippines
- Larsen & Toubro Limited - India
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Indogreen Group - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
- Australian Coal Association
- Central Java Power - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Deloitte Consulting - India
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- PTC India Limited - India
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- Attock Cement Pakistan Limited
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