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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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Monday, 11 October 21
COAL ABANDONMENT IN POWER GENERATION PROMOTED GAS DEMAND GROWTH IN EUROPE - TOP MANAGER: TASS
Accelerated abandonment of coal in power generation and the overall recovery of economic activity facilitated gas demand growth in Europe and led t ...
Saturday, 09 October 21
CHINA POWER CUTS: COAL MINERS ORDERED TO BOOST OUTPUT, SAY REPORTS - BBC
Beijing has reportedly ordered China’s coal mines to boost output as an energy shortage across the country has seen millions of homes and bus ...
Friday, 08 October 21
SEPTEMBER CRUDE OIL TANKER DEMOLISHING HITS 39-MONTHS HIGH AT 1.9M DWT - PETER SAND
Has the lid finally come off for crude oil tanker demolition in 2021? If judged by the 1.9m DWT of capacity that was removed in September, the answ ...
Friday, 08 October 21
COAL SHORTAGE MAY LEAD TO RISE IN STEEL PRICES IN COMING MONTHS: JSPL MD - PTI
Steel prices are expected to increase in the coming months as companies are buying coal at three times the rates a month ago, said a top industry e ...
Wednesday, 06 October 21
INDONESIA COAL PRICE REFERENCE: ANOTHER MONTH, ANOTHER RALLY
COALspot.com: Indonesian Coal Price Reference in a steep climb for most of second and third quarters of 2021 as it reached a pinnacle of $161.63 Oc ...
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- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Carbofer General Trading SA - India
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- Independent Power Producers Association of India
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
- The University of Queensland
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Romanian Commodities Exchange
- Posco Energy - South Korea
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Planning Commission, India
- Mercator Lines Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
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