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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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Thursday, 29 October 09
COAL OF AFRICA SEES VELE OUTPUT BY APRIL 2010
* First coal from Mooiplaats mined and sold
* Talks with Transnet on rail PPP on track
Reuters reported that, Coal of Africa (CoAL) said on Mond ...
Thursday, 29 October 09
UAE FUND EYES INDIA POWER FOR INDONESIAN COAL
Reuters reported that, the UAE's Middle East Coal (MEC) is in talks to buy equity stakes in India's power plants in exchange for long-term coal su ...
Thursday, 29 October 09
CESC POSTS RS 126 CRORE (US$ 26,655,178) NET PROFIT IN QUARTER TWO
Economic Times reported that, Energy major CESC posted a marginal increase in net profit at Rs 126 crore (US$ 26,655,178) for the quarter ended Sep ...
Thursday, 29 October 09
INDIA MMTC TENDER SET TO BOOST S.AFRICA COAL
The South African coal market is set to be boosted further by India's state-owned trading firm MMTC Ltd's tender for 12.5 million tonnes, Indian t ...
Thursday, 29 October 09
INDIA CEMENTS SET TO ACQUIRE COAL MINE IN INDONESIA
Business-Standard reported that, India Cements is set to acquire a coal mine in Indonesia for around $20 million (around Rs 100 crore). The company ...
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- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- PTC India Limited - India
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Australian Coal Association
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Essar Steel Hazira Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
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