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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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Saturday, 07 November 09
THE STEAM COAL MOVEMENT FROM INDONESIA TO INDIA REMAINED QUITE STRONG - CAPT. REDDY
COALspot.com (Singapore): The BDI continued rising this week and was up by 290 points up by almost 9 pct and the index closed at 3,393 points.
B ...
Friday, 06 November 09
COAL INDIA ABANDONS PLAN TO BUY ASSET IN AUSTRALIA
Coal India’s efforts to acquire a mid-sized virgin thermal coal block from a private party in Australia have drawn a blank.
The effort was ...
Friday, 06 November 09
NEW ASSETS WILL INCREASE COKING AND THERMAL COAL PRODUCTION
Coal and metals processing company Coal of Africa Limited (CoAL) aims to produce 10-million tons a year of coking coal and two-million tons a year o ...
Friday, 06 November 09
NTPC TO APPOINT MERCHANT BANKER FOR S AFRICA COAL MINE
State-run power producer NTPC, which is eyeing coal mines in South Africa to meet the gap in domestic fuel supply, will appoint a merchant banker ne ...
Thursday, 05 November 09
MERCATOR LINES AIMS TO BECOME A $5 BILLION COMPANY
Mercator Lines, India’s second largest private sector shipping line, plans to invest and expand, riding India’s next wave of growth, the ...
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- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- Planning Commission, India
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- Australian Coal Association
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Independent Power Producers Association of India
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Minerals Council of Australia
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- PTC India Limited - India
- Orica Australia Pty. Ltd.
- Sindya Power Generating Company Private Ltd
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- SMC Global Power, Philippines
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
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