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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, 27 August 20
BANGLADESH POWER MINISTRY SEEKING AUTHORITY TO CANCEL 13,000 MW OF PROPOSED COAL-FIRED CAPACITY - BUSINESS STANDARD
In a bid to move away from dirty energy, the Ministry of Power, Energy and Mineral Resources is seeking the prime minister’s approval to conv ...
Wednesday, 26 August 20
ASIAN COAL PRICES LIKELY TO REMAIN DEPRESSED SAY TRADERS, ANALYSTS - REUTERS
Asian coal prices, which have fallen around 25% this year as power demand slumped due to the coronavirus outbreak, are unlikely to move higher befo ...
Wednesday, 26 August 20
WORLD COAL EXPORTS: INDONESIAN THERMAL COAL EXPORTS HAVE COME UNDER PRESSURE AS THERMAL COAL PRICES WEAKEN - REPORT
Indonesia’s exports to decline sharply from record highs
Indonesia is the world’s largest thermal coal exporter, sellin ...
Wednesday, 26 August 20
JAPAN'S COAL IMPORTS ARE BEING AFFECTED BY COMPETING INFLUENCES - REPORT
Japan is the world’s third largest thermal coal importer, importing an estimated 135 million tonnes of thermal coal in 2019. The country&rsqu ...
Wednesday, 26 August 20
PENDING SOUTH KOREA LEGISLATION COULD FORCE HALT TO COUNTRY’S COAL PLANT EXPORT DEALS - KOREA ECONOMIC DAILY
South Korea’s parliament looks set to pass new legislation to ban financing on foreign coal power projects, putting all overseas coal-fired p ...
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- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Bangladesh Power Developement Board
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- Orica Australia Pty. Ltd.
- Simpson Spence & Young - Indonesia
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Economic Council, Georgia
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- ICICI Bank Limited - India
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- White Energy Company Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- Planning Commission, India
- Eastern Coal Council - USA
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Coal and Oil Company - UAE
- Holcim Trading Pte Ltd - Singapore
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- Australian Coal Association
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Directorate Of Revenue Intelligence - India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Cigading International Bulk Terminal - Indonesia
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
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