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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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Tuesday, 07 December 21
COAL FIRMS SEE SHARE PRICES SURGE MONDAY, AFTER GOVERNMENT READJUSTS CONTRACT PRICES - GLOBAL TIMES
Share prices of China’s coal enterprises jumped on Monday on the A-share market following a nationwide adjustment to annual thermal coal pric ...
Monday, 06 December 21
CHINA SETS 2022 ANNUAL THERMAL COAL PRICES AT 700 YUAN/T - MEDIA: REUTERS
China’s top economic planner has proposed to set annual thermal coal prices for 2022 at between 550 yuan and 850 yuan ($86-$133) per tonne, a ...
Thursday, 02 December 21
BUMI RECORDED US$ 666.18 MILLION AS REVENUE IN THE 3RD QUARTER, UP 13.31% YOY
PT Bumi Resources Tbk and its subsidiaries have recorded a surge in revenue in the third quarter of 2021. BUMI has recorded US$ 666.18 million as r ...
Thursday, 02 December 21
CHINA'S COAL CRUNCH IS OVER, BUT PRICES ARE STILL TOO HIGH - REUTERS
China’s coal crisis has largely been resolved with gains in both production and stockpiles sufficient to ensure power supplies over winter.
...
Wednesday, 01 December 21
2022 OUTLOOK: INDONESIAN COAL MINING - FITCH RATINGS
Fitch Ratings has a neutral outlook on the Indonesian coal sector for 2022.
Earnings generation should slow down as selling pr ...
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- Bhatia International Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Sindya Power Generating Company Private Ltd
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- The University of Queensland
- The Treasury - Australian Government
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Ministry of Mines - Canada
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- International Coal Ventures Pvt Ltd - India
- Petron Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- Xindia Steels Limited - India
- GMR Energy Limited - India
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- MS Steel International - UAE
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- McConnell Dowell - Australia
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
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