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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, 19 December 19
COAL POWER GENERATION CONTINUES TO DECLINE IN GERMANY: DESTATIS, XINHUA REPORTED
The volume of electricity generated in coal-fired power plants in Germany decreased “markedly” by 37 percent to 34 billion kilowatt-hou ...
Thursday, 19 December 19
BANGLADESH'S NBR CUTS VAT ON COAL IMPORT FOR POWER PLANTS - THE DAILY STAR
The National Board of Revenue (NBR) reduced value added tax on the import of coal for power plants to 5 percent from present 15 percent for five ye ...
Wednesday, 18 December 19
AVERAGE PRICES OF COAL IN 2018 WERE MORE THAN 60% HIGHER THAN IN 2016 - IEA
Coal use grew again in 2018.
Global coal demand increased by 1.1%, continuing the rebound that began in 2017 after three years of decline ...
Wednesday, 18 December 19
ASIA IS SET TO SUPPORT GLOBAL COAL DEMAND FOR THE NEXT FIVE YEARS - IEA
Press Release: Global coal demand is expected to decline in 2019 but remain broadly stable over the next five years, supported by robust growth in ...
Wednesday, 18 December 19
SHIPPING MARKET INSIGHT - INTERMODAL
As we all know very well by now, the reduction in the maximum allowable sulphur content of marine fuels in 2020 is likely to have a massive impact ...
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- Baramulti Group, Indonesia
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- Bayan Resources Tbk. - Indonesia
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Dalmia Cement Bharat India
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kartika Selabumi Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Minerals Council of Australia
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- Rio Tinto Coal - Australia
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- LBH Netherlands Bv - Netherlands
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Georgia Ports Authority, United States
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- Antam Resourcindo - Indonesia
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Indogreen Group - Indonesia
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
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