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