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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, 12 August 20
THE COAL MARKET IN ITALY - ASSOCARBONI
Italy, which in 2019 reported a decrease in thermal coal imports, with a volume of 7,5 million tons (-32% compared to 11 million tons in 2018), whi ...
Wednesday, 12 August 20
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EIA expec ...
Tuesday, 11 August 20
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Monday, 10 August 20
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Saturday, 08 August 20
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Global Energy Monitor’s latest Global Coal Plant Tracker has put another nail in the coffin for the coal-carrying fleet with its finding that ...
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- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- White Energy Company Limited
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Global Business Power Corporation, Philippines
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- Attock Cement Pakistan Limited
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Billiton Holdings Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Sakthi Sugars Limited - India
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Australian Coal Association
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Kartika Selabumi Mining - Indonesia
- Aditya Birla Group - India
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
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