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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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Saturday, 08 January 11
AUSTRALIAN FLOODS MAY BOOST RIS COAL SALES - THE JAKARTA POST
The Jakarta Post reported that, Floods inundating Queensland have disrupted Australian coal production, and in turn may offer opportunities for Indo ...
Saturday, 08 January 11
GOVERNMENT REMAINS CAUTIOUS OVER FOREIGN INVESTMENT IN MINING SECTOR - THE JAKARTA GLOBE
The Jakarta Globe reported that, The government expects $3.2 billion of investment to flow into the mining sector this year as foreign investors tur ...
Friday, 07 January 11
14 LARGE-SCALE COAL BASES TO BE BUILT DURING 12TH FIVE-YEAR PLAN - GLOBAL TIMES
During the Twelfth Five-Year Plan period (2011-2015), China aims to build 14 large-scale coal bases, and annex and restructure 20 coal bases in orde ...
Friday, 07 January 11
JSW ENERGY LTD OF INDIA IS LOOKING FOR 45 MILLION TONS OF STEAM COAL FOR 25 YEARS
COALspot.com - Supply of 1.80 mmt (+/- 10%) of steam coal per annum for power plants at Toranagallu and Jaigad.
Accordign to JSWE's websit ...
Friday, 07 January 11
SRI LANKA NEW PORT TO OFFER SHIP FUEL IN MAY - LBO
LOB reported that, The Sri Lanka Ports Authority (SLPA) plans to start bunkering or ship fuel operations at a new port in southern Hambantota in May ...
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- Manunggal Multi Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Thai Mozambique Logistica
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate General of MIneral and Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- PetroVietnam Power Coal Import and Supply Company
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Posco Energy - South Korea
- Kartika Selabumi Mining - Indonesia
- Semirara Mining Corp, Philippines
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Banpu Public Company Limited - Thailand
- Bhatia International Limited - India
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Parliament of New Zealand
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- VISA Power Limited - India
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- Siam City Cement PLC, Thailand
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
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