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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, 23 August 11
PENRHYN COAL USING EVERGREEN ENERGYS COAL UPGRADING PROCESS
Evergreen Energy Inc has announced the successful testing results of the initial batches of Penrhyn coal using Evergreen Energy’s coal upgradi ...
Tuesday, 23 August 11
A SHARP INCREASE IN THE BDI - BRS
A sharp increase in the BDI this week, driven by the rise in Capesize rates. Overall the BDI was up 13.5% to 1,462 points on the back of a 20% surge ...
Monday, 22 August 11
INDONESIA TO BAN BELOW 5700 KCAL/KG COAL FOR EXPORT
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia is in the process of drafting a regulation which is requiring mine owners ...
Monday, 22 August 11
JATENERGY AGREED TO FORM JV WITH AN INDONESIAN COAL MINING COMPANY
COALspot.com - Australian’s listed company, Jatenergy Limited has entered conditional agreement to form joint venture with Indonesia’s c ...
Monday, 22 August 11
NTPC TO IMPORT 16 MILLION TON OF COAL TO BRIDGE THE GAP
COALspot.com - NTPC to import 16 million tons of imported coal, which is equivalent to 23-24 million tons of Indian coal to bridge the gap.
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- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- Georgia Ports Authority, United States
- Karaikal Port Pvt Ltd - India
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Borneo Indobara - Indonesia
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- LBH Netherlands Bv - Netherlands
- Coalindo Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- PTC India Limited - India
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Malabar Cements Ltd - India
- The University of Queensland
- Grasim Industreis Ltd - India
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- White Energy Company Limited
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Formosa Plastics Group - Taiwan
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Krishnapatnam Port Company Ltd. - India
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