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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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Thursday, 17 December 09
THE 6TH CLEAN ENERGY FORUM - CLEAN COAL 2010
COALspot.com (China) - Press Release: The 6th Clean Energy Forum--Clean Coal 2010 January 27-29, 2010 Renaissance Tianjin Teda Hotel And Conven ...
Thursday, 17 December 09
JFE STEEL INVESTS $555 MILLION IN AUSTRALIA COAL MINE
JFE Steel Corp., Japan’s second- largest producer, will invest 50 billion yen ($555 million) in a coal mine in Queensland, Australia, includin ...
Thursday, 17 December 09
CHINA, INDIA DEMAND MAY BOOST THERMAL COAL PRICE, JPMORGAN SAYS
Demand for thermal coal from China and India may boost prices of the fuel to $80 a metric ton next year amid reduced supplies and lower inventories, ...
Thursday, 17 December 09
RBCT PROBLEMS TO CAUSE STEAM COAL PRICE SPIKE IN Q1
Bugs in the new computer system at South Africa's Richards Bay Coal Terminal and persistent rail problems will make it impossible for exporters to ...
Thursday, 17 December 09
CIL TO IMPORT 4 MILLION TONNES COAL FOR NTPC
The country's largest coal miner Coal India Ltd (CIL) will import 4 million tonnes of coal for state-run power company NTPC.
"Earlier, ther ...
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- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- Indonesian Coal Mining Association
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Parry Sugars Refinery, India
- Marubeni Corporation - India
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Attock Cement Pakistan Limited
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- VISA Power Limited - India
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- Vedanta Resources Plc - India
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Wood Mackenzie - Singapore
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Kaltim Prima Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Coalindo Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Australian Coal Association
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
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