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