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