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