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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
PTC INDIA UNIT CHASES 2.5 MTPA INDONESIAN COAL
Reuters reported that, PTC Energy is in talks with an Indonesian firm to source 2.5 million tonnes per annum (MTPA) coal for its 350-400 MW power to ...
Thursday, 29 October 09
CHINA MAY SEEK THERMAL COAL ELSEWHERE IF AUSTRALIAN EXPORT COSTS RISE, SAYS REPORT
The Australian reported that, CHINA is likely to turn to alternative markets for thermal coal if the cost and availability of Australia's exports a ...
Thursday, 29 October 09
CURRENCIES, ASIA DEMAND TO LIFT EUROPE COAL PRICE
Supportive currency movements and strong Asian demand mean the price of coal delivered into Europe is poised to rise more than 30 percent to above $ ...
Wednesday, 28 October 09
AUSTRALIAN POWER STATION COAL PRICE TOPPED USD 73 A TONNE
Reuters reported that prices of power station coal in Australia, a benchmark for Asia, crept up for the fourth week and topped USD 73 a tonne, as a ...
Wednesday, 28 October 09
MIDDLE EAST COAL EYEING INDIAN POWER PLANTS IN EXCHANGE FOR LONG TERM COAL SUPPLY
Reuters reported that UAE's Middle East Coal is in talks to buy equity stakes in India's power plants in exchange for long term coal supply.
ME ...
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- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- Eastern Coal Council - USA
- Australian Coal Association
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Latin American Coal - Colombia
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- Planning Commission, India
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Madhucon Powers Ltd - India
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- Indika Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- Malabar Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- TeaM Sual Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- Electricity Generating Authority of Thailand
- Pendopo Energi Batubara - Indonesia
- Independent Power Producers Association of India
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- The University of Queensland
- Lanco Infratech Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
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