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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, 16 November 21
INDONESIA’S 2022 COAL USE FOR POWER GENERATION SET TO RISE 3% - REUTERS
Indonesia’s coal consumption for power generation is likely to rise by 3.1% next year compared to 2021, the head of the country’s state ...
Tuesday, 16 November 21
CHINA'S MONTHLY COAL OUTPUT RISES TO HIGHEST SINCE MARCH 2015 - REUTERS
China’s October coal output rose to the highest since at least March 2015, after Beijing approved a raft of coal mine expansions to tame reco ...
Friday, 12 November 21
RUSSIA-INDIA COKING COAL DEAL UNLIKELY TO IMPACT PANAMAX SHIPPING - DREWRY
Russia and India have recently entered into an agreement whereby Russia will supply up to 40 million tonnes of coking coal to India every year. Dre ...
Friday, 12 November 21
ASIA COAL POWER PIPELINE TO SHRINK BY TWO THIRDS AFTER CHINA FINANCE CUT - REUTERS
Asia’s pipeline of proposed coal-fired power plants is expected to shrink from 65 gigawatts to 22 gigawatts following China’s pledge to ...
Friday, 12 November 21
INDONESIAN COAL PRICE REFERENCE TOPS $215 A TON; THE HIGHEST COAL PRICE IN HISTORY
COALspot.com: Indonesian Coal Price Reference in a steep climb for most of second half of 2021 as it reached a pinnacle of $215.01 in November 2021 ...
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- Bhushan Steel Limited - India
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- CNBM International Corporation - China
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- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Formosa Plastics Group - Taiwan
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- Indian Oil Corporation Limited
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Parliament of New Zealand
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- The University of Queensland
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Australian Coal Association
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Sical Logistics Limited - India
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GN Power Mariveles Coal Plant, Philippines
- ICICI Bank Limited - India
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
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