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