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