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