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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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Wednesday, 16 December 09
INDONESIA'S FIRST PRIVATE RAILWAY TO BOOST RAK'S MINING INTERESTS
MEC infra to invest $1b in construction of 130-km transport link
A 130-kilometre railway that will ease the transport of raw materials and finish ...
Tuesday, 15 December 09
KOMIPO HAS ISSUED A NEW TENDER FOR 30000 MT OF 5200 NAR KCAL/KG COAL
COALspot.com (South Korea): South Korean state-owned utility Korea Midland Power (KOMIPO) has issued an new tender for prompt supply of 30000 M ...
Tuesday, 15 December 09
CHINA CUTS IMPORT DUTIES ON COAL, RAISES FOR OTHERS
China will lower import duties on more than 600 products next year, including coal, naphtha and phosphate ore, the Finance Ministry said on Tuesday. ...
Tuesday, 15 December 09
NTPC'S COAL WOES UNLIKELY TO END SOON
State-owned power producer NTPC’s woes over shortages of coal may not end soon. Though the company is importing 12.5 million tonnes of coal&nb ...
Monday, 14 December 09
RICHARDS BAY COAL TO FINISH EXPANSION IN 1ST QUARTER
Richards Bay Coal Terminal, which ships more than a quarter of Europe’s energy coal, said it will complete its Phase 5 expansion project in th ...
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- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- Eastern Energy - Thailand
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- VISA Power Limited - India
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Economic Council, Georgia
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Mercuria Energy - Indonesia
- The University of Queensland
- Indogreen Group - Indonesia
- Cement Manufacturers Association - India
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Marubeni Corporation - India
- Ministry of Mines - Canada
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
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