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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, 30 December 09
INDIA CEMENTS TO FINALIZE 3 SHIPMENTS OF SOUTH AFRICAN COAL NEXT WEEK
COALspot.com (India): India Cements is looking for 3 shipments (150,000MT) of South African coal for January – March 2010 delivery on C ...
Wednesday, 30 December 09
BANPU EXPECTS STABLE COAL PRICES
2009 revenue growth will be hard to beat
Banpu Plc, Asean's largest coal miner, expects coal prices to stay firm at about US$80 per tonne in the f ...
Wednesday, 30 December 09
CIL DELISTS JAGUAR ENERGY FOR KODA LINKS
Coal India Ltd (CIL) has dropped Indonesia-based Jaguar Energy & Power Ltd from the list of companies, it intended to forge partnerships with to ...
Wednesday, 30 December 09
COAL PRICE RISE REQUEST DENIED
A proposal by the Viet Nam National Coal and Mineral Industries Group to double the price of coal has been turned down by the Ministry of Industry a ...
Wednesday, 30 December 09
CHINA'S 2010 COAL DEMAND COULD RISE 4%-6%, ACCORDING TO CHINA SECURITIES JOURNAL
China, which is the world’s second-largest energy user, may consume between 4 and 6% more coal next year on continued economic growth, China S ...
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- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Agrawal Coal Company - India
- Planning Commission, India
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Parry Sugars Refinery, India
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- PowerSource Philippines DevCo
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- CNBM International Corporation - China
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- The University of Queensland
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
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