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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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Monday, 10 January 11
DEWA SEEKS ADVICE ON COAL POWER PROJECT -THE NATIONAL
The Dubai utility company gets nine bids from international groups for consultancy role.
The National reported that, Dubai's utility company wil ...
Saturday, 08 January 11
COAL PRICE WILL RISE IN SHORT-TERM DUE TO AUSTRALIA FLOODS - ALBUQUERQUE EXPRESS
Albuquerque Express reported that, Queensland’s mining minister, Stephen Robertson, has warned that the Australian state’s coal mines wi ...
Saturday, 08 January 11
THE INDONESIAN COAL REFERENCE PRICE HAS JUMPED 8.69 PERCENT IN JANUARY 2011
COALspot.com - Indonesia’s Ministry of Energy and Mineral Resources has set the January 2011 Indonesian Coal Reference Price for thermal ...
Saturday, 08 January 11
SUPRAMAX VESSELS WERE FIXED AT AROUND $ 9000 PD FOR A TRIP VIA INDONESIA TO INDIA - VISTAAR
COALspot.com - The holiday season affect combined with severe flooding in Queensland ports continues to keep the market and pressure. “Suprama ...
Saturday, 08 January 11
DIFFICULT YEAR FOR SHIPPING - TRANSPORT WEEKLY
Transport Weekly reported that, Shipping Corporation of India (SCI) chairman Sabyasachi Hajara says 2011 will be a difficult year because an excess ...
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- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- Metalloyd Limited - United Kingdom
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Binh Thuan Hamico - Vietnam
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Eastern Energy - Thailand
- Sree Jayajothi Cements Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Aditya Birla Group - India
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Australian Coal Association
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- The University of Queensland
- Sindya Power Generating Company Private Ltd
- SMC Global Power, Philippines
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