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