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