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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, 03 February 10
RECOVERY IN INDONESIAN MINING SECTOR EXPECTED TO BOOST SALES, UNITED TRACTORS SAYS
PT United Tractors, the country’s biggest supplier of heavy equipment, said on Tuesday that it expected sales to increase 15 percent this year ...
Tuesday, 02 February 10
THAI BANPU SAYS HIGHER COSTS TO HIT COAL PROFITS
Thailand's top coal miner, expects profits from its coal business in 2010 to be lower than last year due to higher costs, but its chief executive i ...
Monday, 01 February 10
CIL PLANS TO INVEST IN OVERSEAS COAL MINES
Over the next 10 years, CIL expects to import from these mines at least 500 million tonnes of thermal coal, a variety used by power plants
The bo ...
Sunday, 31 January 10
AUSTRALIA NEWCASTLE THERMAL COAL FALLS 0.7 PERCENT TO $ 98.53
Power-station coal prices at Australia’s Newcastle port, a benchmark for Asia, declined 0.7 percent, falling for the first time in four weeks. ...
Sunday, 31 January 10
NTPC TO IMPORT COAL
NTPC Ltd plans to import coal directly, starting next fiscal.
“We plan to import 15-16 million tonnes of coal directly from next year,&rdqu ...
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- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Sindya Power Generating Company Private Ltd
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Toyota Tsusho Corporation, Japan
- GN Power Mariveles Coal Plant, Philippines
- Binh Thuan Hamico - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Larsen & Toubro Limited - India
- Orica Mining Services - Indonesia
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Sical Logistics Limited - India
- London Commodity Brokers - England
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- Ceylon Electricity Board - Sri Lanka
- Timah Investasi Mineral - Indoneisa
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indonesian Coal Mining Association
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- Central Electricity Authority - India
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Interocean Group of Companies - India
- Australian Coal Association
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Madhucon Powers Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Attock Cement Pakistan Limited
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Heidelberg Cement - Germany
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Planning Commission, India
- Lanco Infratech Ltd - India
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