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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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Tuesday, 22 December 09
NEWCASTLE COAL SHIP QUEUE LONGEST IN TWO YEARS AS EXPORTS SLOW
Bloomberg reported that, the queue of coal ships waiting at Australia’s Newcastle port, the world’s biggest export harbor for the fuel, ...
Monday, 21 December 09
INDONESIA HAS EXPORTED AROUND 195.303 MILLION TONS OF COAL TILL END OF NOVEMBER 2009
COALspot.com (Indonesia): China has been the largest single buyer of Indonesian coal in November 2009, by taking 28.69% of total exported quan ...
Monday, 21 December 09
RUSSIAN COAL MINER SUEK EYES '10 LONDON IPO
* Company valued at around $8-$9 bln - banking source
* IPO could take place in H1 - source
* May list 25 pct of share capital - report
Reuters ...
Monday, 21 December 09
IGCC OUTLOOK CHINA 2010 TO BE HELD IN APRIL 2010 IN SHANGHAI
COALspot.com (China): Press Release - Aiming at unveiling the growth area of IGCC polygeneration, IGCC Outlook China 2010 is planned to be hel ...
Sunday, 20 December 09
GLOBAL COAL MAJORS MAKE THEIR PRESENTATIONS
Major energy companies from four countries, including the U.S., Indonesia and South Africa, have completed detailed presentations before a committee ...
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- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- White Energy Company Limited
- Marubeni Corporation - India
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Interocean Group of Companies - India
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Sakthi Sugars Limited - India
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petron Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Deloitte Consulting - India
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- The University of Queensland
- Global Business Power Corporation, Philippines
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Economic Council, Georgia
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
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