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