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