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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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Wednesday, 20 April 11
TNPL SECURED 160K MT OF COAL WITH CALORIFIC VALUE 6000 GAD AT US$ 93.44 PMT
COALspot.com - Delhi based Knowledge Infrastructure Systems Pvt. Ltd once again offered the lowest price of US$ 93.44 per metric ton for calorific v ...
Wednesday, 20 April 11
TSI LAUNCHES GEO-COAL UPGRADING TECHNOLOGY
Simple yet effective process boosts calorific value of low rank coal to provide lower cost energy across the world.
Press Release - Total Sinergy ...
Wednesday, 20 April 11
ADARO TO PAY OUT RP 970B IN DIVIDENDS - THE JAKARTA POST
The Jakarta Post reported that, the annual shareholders meeting of coal producer PT Adaro Energy on Wednesday agreed on the disbursement of Rp 970.7 ...
Wednesday, 20 April 11
INDIA IMPORTS MORE COAL FROM INDONESIA
COALspot.com - Indonesian coal exports jumped 23.31 percent during March 2011. The world’s largest coal exporter shipped 27, ...
Tuesday, 19 April 11
LONDON COMMODITY BROKERS OPENS JOHANNESBURG OFFICE
COALspot.com - London Commodity Brokers (LCB), a broking house specialising in bulk physical and Over-The-Counter commodities and options (coal ...
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- Bharathi Cement Corporation - India
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Mercuria Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Sree Jayajothi Cements Limited - India
- Malabar Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Manunggal Multi Energi - Indonesia
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- Cement Manufacturers Association - India
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- Siam City Cement - Thailand
- Parliament of New Zealand
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- PetroVietnam Power Coal Import and Supply Company
- Goldman Sachs - Singapore
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- Commonwealth Bank - Australia
- The University of Queensland
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Larsen & Toubro Limited - India
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