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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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Wednesday, 11 August 10
BANPU SECURES TAKEOVER LOAN - BANGKOK POST
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, has secured loans worth US$2 billion from Thai and foreign banks to proceed with ...
Tuesday, 10 August 10
KOREA'S EWP TO BUY 4 MILLION TON OF 3700 AND 4600 NAR COAL AT FIXED PRICE
COALspot.com: Korean utility East-West Power out with the tender to buy 0.670 million tons with a minimum calorific value of 4600 NAR and 0.350 mill ...
Tuesday, 10 August 10
COAL CONSTRAINS CORE SECTOR GROWTH IN JUNE 2010
Growth in the six key infrastructure sectors decelerated for the third month in June. This is primarily due to last year’s high base effect. D ...
Sunday, 08 August 10
SOUTH AFRICA INCREASES COAL EXPORTS TO INDIA BY 74% IN JULY, TRADER SAYS
South Africa’s Richards Bay, the continent’s largest coal terminal, increased sales to India by 74 percent in July from June, according ...
Saturday, 07 August 10
INDIAN COAL IMPORTS WILL PLAY AN IMPORTANT PART IN KEEPING THE FREIGHT MARKET FIRM IN FUTURE - VISTAAR
COALspot.com: The freight market was volatile with market ending firmed and the BDI crossing 2000 points up by 3 pct, however the BCI was up by 14 p ...
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- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- Economic Council, Georgia
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- The Treasury - Australian Government
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Cigading International Bulk Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- AsiaOL BioFuels Corp., Philippines
- Energy Link Ltd, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Thai Mozambique Logistica
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Africa Commodities Group - South Africa
- White Energy Company Limited
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
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