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