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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, 27 January 10
PEABODY ENERGY EYES 'RED HOT' ASIAN COAL DEMAND
US miner Peabody Energy has seen already-strong Asian markets become “red hot”, as demand for metallurgical and thermal coal strains sup ...
Wednesday, 27 January 10
KOLKOTTA BASED POWER UTILITY CESC LOOKING FOR 100,000 MT OF COAL FOR MAY & JUNE DELIVERY
COALspot.com (India): Kolkotta based power utility CESC, the flagship company of the diversified RPG group of India, has issued a closed tender to b ...
Tuesday, 26 January 10
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The Decembe ...
Tuesday, 26 January 10
VITOL BUYS EXPORT SPACE AT COLOMBIA SANTA MARTA PORT
Global energy trader Vitol has signed a four-year deal to take export capacity at Colombia's 3 million tonnes a year Carbonsan port in Santa Marta, ...
Tuesday, 26 January 10
AUSTRALIAN FIRM TO MINE COAL IN WEST BENGAL
India Resources Ltd (IRL), a mining firm listed on the Australian Stock Exchange, has decided to enter into contract mining of coal in
India ...
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- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Krishnapatnam Port Company Ltd. - India
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Eastern Energy - Thailand
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- Indian Energy Exchange, India
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- London Commodity Brokers - England
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Holcim Trading Pte Ltd - Singapore
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- Posco Energy - South Korea
- VISA Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Samtan Co., Ltd - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Mintek Dendrill Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Global Business Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- Tata Chemicals Ltd - India
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- Central Java Power - Indonesia
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