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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, 11 November 09
INDONESIA ASKS DOMESTIC COAL FIRMS TO SET ASIDE 30PCT OF OUTPUT
Indonesian government said that it had asked domestic coal producers to set aside 30% of their output next year to meet demand from new coal fired p ...
Wednesday, 11 November 09
MINING ACQUISITIONS BECOMING MORE STRATEGIC - E&Y
Mining Weekly reported that, Although miners around the world are looking to position themselves for growth, companies are being more selective when ...
Tuesday, 10 November 09
THAI COAL MINER BANPU Q3 NET UP, BEATS FORECAST
Reuters reported that, Thailand's top coal miner, Banpu, said on Tuesday its third-quarter net earnings rose a higher-than-expected 22 percent, hel ...
Monday, 09 November 09
NAPOCOR DEFERS 50,000 T COAL TENDER
Top Philippine electricity producer National Power Corp. (Napocor) has indefinitely postponed a tender for supply of 50,000 tons of steam coal sched ...
Monday, 09 November 09
SAM'S SEAFOOD HOLDINGS SET TO COMMENCE DRILLING AT INDONESIAN COAL PROJECT
Proactive Investors reported that, Sam's Seafood Holdings is preparing to kick off diamond drilling at the company's Indonesian coal project after ...
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- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GAC Shipping (India) Pvt Ltd
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Planning Commission, India
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- CNBM International Corporation - China
- CIMB Investment Bank - Malaysia
- Africa Commodities Group - South Africa
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- Gujarat Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- MS Steel International - UAE
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- The University of Queensland
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
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