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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, 26 October 21
CHINA'S COAL-RICH SHANXI BEEFS UP COAL PRODUCTION - XINHUA
Major coal producers in north China’s Shanxi Province, a leading coal-producing region of the country, have beefed up production to ensure en ...
Tuesday, 26 October 21
ENERGY CRISIS SHOWS COAL IS AN EXPENSIVE AND UNRELIABLE SOURCE OF ELECTRICITY GENERATION - IEEFA
Any knee-jerk reaction that urges more investment in coal completely misses the point
India is teetering on the brink of joining a growing glo ...
Tuesday, 26 October 21
CHINA TO INVESTIGATE ENERGY INDEX PROVIDERS IN BID TO TAME COAL PRICES - REUTERS
China said on Monday it will investigate energy price index providers as it urged coal industry participants to “strictly” meet contrac ...
Tuesday, 26 October 21
THERE IS PLENTY OF COAL AND GAS IN THE WORLD BUT A VOLATILE MARKET IS NOBODY'S FRIEND - IEEFA
Gas will be winding its way out of the energy system
Gas prices are continuing to surge around the world. The cost of gas is at unpr ...
Tuesday, 26 October 21
AUSTRALIA EXPORTED 51.6 MLN TONNES OF COAL TO INDIA IN FIRST 10 MONTHS, 19% OF ALL AUSTRALIAN COAL EXPORTS; CHINA WAS THE DESTINATION FOR JUST 0.7% - BANCHERO COSTA
2020 proved to be a truly terrible year for global seaborne coal trade. In 2021 things started pretty badly, but we are seeing increasing signs of ...
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- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Maheswari Brothers Coal Limited - India
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Bukit Baiduri Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- London Commodity Brokers - England
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Malabar Cements Ltd - India
- PTC India Limited - India
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Posco Energy - South Korea
- White Energy Company Limited
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
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