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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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Saturday, 11 September 21
CIL STEPS UP SUPPLY COAL TO POWER SECTOR; PER-DAY AVERAGE 20 PC HIGHER THAN LAST YEAR - PTI
State-owned CIL on Friday said it has stepped up the supply of coal to the power sector in the first eight days of the current month, with an avera ...
Saturday, 11 September 21
RECORD CHINESE COAL FUTURES SIGNAL NEED TO BOOST OUTPUT - REUTERS
China’s coal prices have climbed to a record high, signaling the need for more production in the short term, even as the government tries to ...
Saturday, 11 September 21
IN 2022, EIA EXPECTS U.S. COAL PRODUCTION TO INCREASE BY 47 MMST TO 648 MMST
U.S. Coal production accordng to EIA's forecast, totals 601 million short tons (MMst) in 2021, 66 MMst more than in 2020, EIA's Short-Term ...
Wednesday, 08 September 21
FITCH RATINGS RAISES THERMAL COAL PRICE ASSUMPTIONS ON TIGHT SUPPLY
Fitch Ratings has increased all its Qinhuangdao 5,500kcal/kg price assumptions and short- and medium-term Newcastle 6,000kcal/kg price assumptions ...
Wednesday, 08 September 21
COAL IS STILL KING; INDONESIAN COAL PRICE REFERENCE ABOVE $150 FOR FIRST TIME IN HISTORY
COALspot.com: The Indonesian Coal Price Reference rose dramatically from US$ 127.05 in February 2011, to a peak of US$ 150.03 in September 2021, be ...
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- Ministry of Transport, Egypt
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Rio Tinto Coal - Australia
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- Orica Mining Services - Indonesia
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Eastern Energy - Thailand
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Australian Coal Association
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Metalloyd Limited - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- SN Aboitiz Power Inc, Philippines
- Videocon Industries ltd - India
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Oldendorff Carriers - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Bhatia International Limited - India
- Trasteel International SA, Italy
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- IHS Mccloskey Coal Group - USA
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
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