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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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Friday, 28 June 24
INDIAN POWER STATIONS STOCKED WITH BUMPER COAL SUPPLY AS TRANSPORT WOES EASE - BUSINESS STANDARD
Even as power demand has touched a historic high of 250 gigawatts (Gw) amid sweltering heat this June, India’s power stations are stocked wit ...
Friday, 28 June 24
INDIA'S CY23 COAL USE LARGER THAN NORTH AMERICA, EUROPE COMBINED - THE HINDU
For the first time, India’s coal consumption surpassed that of North America and Europe combined in the calendar year 2023, said Energy Insti ...
Monday, 24 June 24
PLN'S FINANCIAL SUSTAINABILITY RESTS ON ACCELERATED COAL RETIREMENT AND RENEWABLES DEPLOYMENT - MUTYA YUSTIKA
On 28 May 2024, Indonesia’s national electricity utility, PT Perusahaan Listrik Negara (PLN), released its financial report for 2023. Althoug ...
Monday, 24 June 24
INDIA'S COAL-BASED POWER DEMAND AT ALL-TIME HIGH, GOVERNMENT SAYS - REUTERS
India’s demand for coal-based power has risen by 7.3% this fiscal year to an all-time high, the government said in a statement on Wednesday.
...
Monday, 24 June 24
CHINA'S COAL INDUSTRY TURNS GREENER THROUGH INNOVATIVE APPROACHES - PEOPLE'S DAILY
At an opencast mine operated by Inner Mongolia Pingzhuang Coal Group Co. Ltd., a subsidiary of CHN Energy Investment Group (CHN Energy), a 14-meter ...
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- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Bukit Asam (Persero) Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- Star Paper Mills Limited - India
- Malabar Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Sarangani Energy Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Australian Coal Association
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Thiess Contractors Indonesia
- Parliament of New Zealand
- PowerSource Philippines DevCo
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- New Zealand Coal & Carbon
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
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