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