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