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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, 02 August 10
LINC, ADANI COMPLETE THEIR COAL CONNECTION
"THE much-speculated deal between underground coal gasification company Linc Energy and India's Adani Enterprises is set to be signed tomorrow ...
Saturday, 31 July 10
TABONEO ANCHORAGE TO LOAD 1.5 MLN TON OR MORE COAL IN H1 AUGUST
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GOVT TOO OPTIMISTIC ON IRON, COAL PRICE
Federal government forecasts of continued strength in iron ore and coal prices, which underpin revenue expectations for the proposed new mining tax, ...
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- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Kalimantan Lumbung Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Cigading International Bulk Terminal - Indonesia
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Romanian Commodities Exchange
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- The University of Queensland
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Electricity Authority, New Zealand
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- The Treasury - Australian Government
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