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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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Thursday, 11 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 ...
Tuesday, 09 November 21
ASIA-PACIFIC IS HOME TO SOME OF THE WORLD'S LARGEST CARBON-EMITTERS - 2 CHARTS SHOW ITS RELIANCE ON COAL - CNBC
Asia-Pacific is home to some of the world’s largest carbon emitters — and experts say much of global efforts to fight climate change de ...
Tuesday, 09 November 21
CHINA DAILY COAL OUTPUT HITS MULTI-YEAR PEAK, PRICES EXPECTED TO FALL - REUTERS
China’s daily coal output hit 11.93 million tonnes last week, a multi-year high as more capacity returned to operation, the state planner sai ...
Thursday, 04 November 21
CHINA'S COAL MARKET SEES SIGNIFICANT IMPROVEMENTS: NDRC - GLOBAL TIMES
China’s top economic planner has declared initial success in its efforts to ensure coal supply and stabilize prices, saying that daily coal o ...
Thursday, 04 November 21
CHINA THERMAL COAL PRICES RISE AFTER FALLING FOR 10 DAYS - REUTERS
China thermal coal futures rebounded on Wednesday after falling for 10 days on an expected jump in fuel demand to meet heating needs amid forecasts ...
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- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Economic Council, Georgia
- Planning Commission, India
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Coalindo Energy - Indonesia
- Star Paper Mills Limited - India
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Interocean Group of Companies - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- San Jose City I Power Corp, Philippines
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Minerals Council of Australia
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- GVK Power & Infra Limited - India
- Merrill Lynch Commodities Europe
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- Coastal Gujarat Power Limited - India
- Georgia Ports Authority, United States
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- McConnell Dowell - Australia
- VISA Power Limited - India
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- Baramulti Group, Indonesia
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- PTC India Limited - India
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
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