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