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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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Friday, 04 December 09
JSW ENERGY TO BUY OUT PARENT FIRM'S COAL BLOCK
JSW Energy plans to buy the stake held by JSW Steel in a thermal coal block in Mozambique in an attempt to become an integrated energy company with ...
Thursday, 03 December 09
JAPAN 2010 COAL IMPORTS SEEN FLAT, INDIA'S ROBUST - INDUSTRY
* Japan's demand seen steady in 2010 at 110 mln tonnes
* India's demand seen as robust, at 70 mln tonnes
Reuters reported that, Thermal coal i ...
Thursday, 03 December 09
INDONESIA MAY ALLOW COAL SALES BELOW GOVT PRICE
Reuters reported that, Indonesia is considering giving producers some flexibility to sell coal below the government's monthly benchmark price to co ...
Thursday, 03 December 09
INDONESIA SEEKS TO INCREASE COAL SHIPMENTS TO INDIA, CHINA
Bloomberg reproted that, Indonesia, Asia’s biggest coal exporter, seeks to increase shipments to India and China as the economies improve and ...
Thursday, 03 December 09
COAL INDIA IPO LIKELY TO HIT MARKETS BY NOVEMBER 2010
Soon investors will get to own a slice of India's largest coal mining company. Coal India its initial public offering will hit markets in November ...
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- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Anglo American - United Kingdom
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chettinad Cement Corporation Ltd - India
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Timah Investasi Mineral - Indoneisa
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- The University of Queensland
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Ceylon Electricity Board - Sri Lanka
- Ind-Barath Power Infra Limited - India
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
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