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