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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, 04 October 10
2 BLN TONS OF COAL RESERVES DISCOVERED IN SOUTHERN PAKISTAN - XINHUA / HELLENIC SHIPPING
Xinhua and Hellenic Shipping reporte dhtat, the discovery of at least two billion tons of usable coal reserves has been confirmed in one of the ...
Sunday, 03 October 10
THE BDI WAS JUST INCREASED BY 8 POINTS AND CLOSED AT 2452 POINTS LAST FRIDAY - VISTAAR
COALspot.com: The BDI was almost at same levels and just increased by 8 points and closed at 2452 points , however the cape index was up by al ...
Sunday, 03 October 10
NALCO TO FINALIZE INDONESIA COAL DEAL BY JANUARY - HINDUSTAN TIMES
HindustanTimes reported that, state-owned National Aluminium Company (NALCO) will finalise a deal with a coal source in Indonesia for its $4 billion ...
Sunday, 03 October 10
INDONESIA WILL BECOME A NET IMPORTER OF ENERGY IN 2030 - BPPT
Jakarta Updates reported that,Indonesian Agency for the Assessment and Application of Technology (BPPT) predicted that the energy situation in Indon ...
Saturday, 02 October 10
FOUR INDONESIAN COAL FIRMS KEEN TO TIE UP WITH NALCO - SIFY
Sify reported that, Four Indonesian coal companies have shown interest to tie up with public sector National Aluminium Company (Nalco) for its 4 bil ...
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- Planning Commission, India
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- Bukit Baiduri Energy - Indonesia
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- VISA Power Limited - India
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Australian Coal Association
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- Bharathi Cement Corporation - India
- Ambuja Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Star Paper Mills Limited - India
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Rio Tinto Coal - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Aditya Birla Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Essar Steel Hazira Ltd - India
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Larsen & Toubro Limited - India
- Indonesian Coal Mining Association
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
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