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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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Monday, 18 April 22
DEMAND FOR THERMAL COAL TO RISE DUE TO INCREASE IN ELECTRICITY DEMAND: INDIAN COAL MINISTRY - PTI
Coal block allocatees have a golden opportunity to augment production as the demand for thermal coal will rise due to an increase in electricity de ...
Tuesday, 05 April 22
INDONESIAN COAL PRICE REFERENCE HITS RECORD ABOVE $288
COALspot.com: Indonesian Coal Price Reference for April in a steep climb from March 2022.
As expected, Russia – Ukraine war dr ...
Thursday, 31 March 22
CHINA STATE PLANNER ASKS COAL INDEX PROVIDERS TO RECTIFY IRREGULARITIES - REUTERS
China’s state planner has asked some major coal price index providers to rectify “severe irregularities” it had identified in the ...
Thursday, 31 March 22
IMPORTED COAL PRICES TO JUMP 55% IN APR-JUN, IMPACT INDIAN FIRMS: ICRA - LIVEMINT
Supply disruption owing to the Russia-Ukraine conflict could push the price of imported coal by 45-55% in Q1FY23 compared to the previous quarter, ...
Thursday, 31 March 22
CHINA'S COAL OUTPUT SET FOR MODERATE GROWTH IN 2022 - INDUSTRY BODY - REUTERS
China is expected to see its coal output to grow further in 2022 after hitting a record last year, an industry body forecast on Wednesday, as the c ...
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- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- London Commodity Brokers - England
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- The University of Queensland
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Medco Energi Mining Internasional
- Riau Bara Harum - Indonesia
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Larsen & Toubro Limited - India
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Manunggal Multi Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Australian Coal Association
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
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