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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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Thursday, 01 April 10
PROFIT AT TWO INDONESIAN COAL MINERS SOARS AS RECOVERY STIRS GREATER DEMAND, HIGHER PRICES - THE JAKARTA GLOBE
The Jakarta Globe reported that, Two of the country’s biggest coal producers enjoyed a surge in profit last year as prices rose and demand pic ...
Thursday, 01 April 10
BHP BILLITON TO SELL STAKE IN MARUWAI TO ADARO - THE JAKARTA POST
The Jakarta Posted reported that, BHP Billiton has agreed to sell 25 percent of its stake in the Maruwai Coal Project in Kalimantan to Indonesia&rsq ...
Thursday, 01 April 10
AUSTRALIAN COAL PRODUCER REJECTS $3 BILLION PEABODY OFFER - STL TODAY
STL today reported that, Australian coal producer Macarthur Coal Ltd. rejected a $3 billion cash takeover bid from Peabody Energy Corp., which seeks ...
Thursday, 01 April 10
TATA POWER EYES MORE COAL FROM INDONESIA FOR ITS FUTURE PLANTS - FINANCIAL EXPRESS
Financial Expressreported that, Tata Power, one of the largest private sector power utilities in the country with interests in generation, transmiss ...
Wednesday, 31 March 10
COAL INDIA MULLS JOINT VENTURE WITH RIO TINTO AND PEABODY - DNA
DNA reported that, Coal India Ltd. (CIL) has finalised two key contenders for its international joint venture (JV) in Australian and US each. The co ...
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- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- Xindia Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- Parry Sugars Refinery, India
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- The University of Queensland
- Antam Resourcindo - Indonesia
- Altura Mining Limited, Indonesia
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
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