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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, 13 February 24
WHAT IS THE OUTLOOK FOR THE NATURAL GAS SPOT PRICE IN 2024 AND 2025? EIA
We expect the U.S. benchmark Henry Hub natural gas spot price to average higher in 2024 and 2025 than in 2023, but to remain lower than $3.00 per m ...
Monday, 12 February 24
US THERMAL COAL EXPORTS HIT 5-YEAR HIGHS AND TOP $5 BLN IN 2023 - REUTERS
United States exporters of thermal coal earned more than $5 billion in 2023 as they shipped out more than 32.5 million metric tons of the high-poll ...
Tuesday, 06 February 24
NEW E-FUELS PROJECT TO MAKE INTERNATIONAL SHIPPING CLIMATE-NEUTRAL - RINA
Transport and trade on the ocean blue must be made much greener. This is the goal of the new €17 million European GAMMA project, where compani ...
Tuesday, 06 February 24
INDIA SEES ANNUAL COAL OUTPUT UP 10.9% IN 2024/25 - REUTERS
India expects domestic coal output to increase by 10.9% to 1.13 billion metric tons in the fiscal year ending March 2025, a senior government offic ...
Tuesday, 06 February 24
INDIA'S COAL PRODUCTION INCREASES BY 10.3% TO 99.73 MILLION TONNE IN JANUARY - PTI
The country’s coal output rose 10.3 per cent to 99.73 Million Tonne (MT) in January, over the same month in the previous fiscal.
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- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Binh Thuan Hamico - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- The University of Queensland
- Planning Commission, India
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- MS Steel International - UAE
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- Economic Council, Georgia
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Grasim Industreis Ltd - India
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Vizag Seaport Private Limited - India
- Eastern Energy - Thailand
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