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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, 25 August 11
OPG EXPECTS COAL PRICES TO REMAIN FIRM IN THE SHORT TERM
COALspot.com - Revenue of OPG, the developer and operator of Group Captive power plants in India up 188% to £33.15m and Income from continuing ...
Thursday, 25 August 11
PAITON POWER LOOKING FOR 3.96 MILLION TONS OF COAL
COALspot.com - PT Pembangkit Jawa Bali (PJB) is looking for 3.96 million tons coal with calorific value 4,800 kcal/kg on as received basis. Accordin ...
Tuesday, 23 August 11
ICMA CALLS GOVERNMENT TO REVIEW EXPORT BAN REGULATION
COALspot.com - Chairman of the Indonesian Coal Mining Association (ICMA) Bob Kamandanu asks the government to review the regulation that being draft ...
Tuesday, 23 August 11
ADARO ENERGY ACQUIRES 75% STAKE OF PT MUSTIKA INDAH PERMAI FOR US$ 222.5 MILLION
COALspot.com - PT Alam Tri Abadi, a wholly owned subsidiary of PT Adaro Energy Tbk, signed a share purchase agreement to acquire a 75% stake of PT M ...
Tuesday, 23 August 11
COAL DEMAND IS REMAINED STRONG IN SPITE OF CURRENT GLOBAL ECONOMIC UNCERTAINTY - BUMI
COALspot.com - Indonesia's largest coal producer, PT Bumi Resources, Tbk (BUMI)'s sales revenue has increased to US$1.79 billion (compared with US ...
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- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Thiess Contractors Indonesia
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- PTC India Limited - India
- Miang Besar Coal Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Goldman Sachs - Singapore
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- Coastal Gujarat Power Limited - India
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- VISA Power Limited - India
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Krishnapatnam Port Company Ltd. - India
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Planning Commission, India
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- London Commodity Brokers - England
- Independent Power Producers Association of India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
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