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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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Tuesday, 01 September 09
GLOBAL COAL PRICES UNDER PRESSURE AS CHINESE PROVINCE RETURNS TO THE PRODUCTION FRAY - REUTERS
China is set to return to role of coal exporter as the deadline for thousands of small coal mines in its Shanxi province to reopen after being shut ...
Tuesday, 01 September 09
INDONESIA PLN SECURES 1.9 MILLION TONNES COAL FOR NEW POWER PLANT
Reuters reported that Indonesia's state electricity firm PT Perusahaan Listrik Negara has secured 1.9 million tonnes of sub bituminous coal per yea ...
Tuesday, 01 September 09
EXPORT OF COAL RAW MATERIAL SHOULD BE REDUCED - INDONESIAN OFFICIAL
Antara reported that, Coal producing companies should reduce the volume of their export of coal raw material and increase the volume of their finish ...
Tuesday, 01 September 09
NEWCASTLE WEEKLY COAL EXPORTS RISE 23%, SHIP QUEUE DECREASES
Bloomberg reported that, Coal shipments from Australia’s Newcastle port, the world’s biggest export harbor for the fuel, rose 23 percent ...
Monday, 31 August 09
INDIA MMTC ISSUE TENDER TO IMPORT 12.5 MMT COAL TO BE SUPPLIED OVER A PERIOD OF 12 MONTHS
COALspot.com (India): MMTC has re-issued a tender to import 12.50 Million Metric Tonnes (12.50 MMT) (+/- 2%) of thermal coal to be supplied over a p ...
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- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- Intertek Mineral Services - Indonesia
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Oldendorff Carriers - Singapore
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- Latin American Coal - Colombia
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- Marubeni Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Siam City Cement PLC, Thailand
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bhoruka Overseas - Indonesia
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Planning Commission, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Indogreen Group - Indonesia
- CNBM International Corporation - China
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Malabar Cements Ltd - India
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Binh Thuan Hamico - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Sarangani Energy Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- The University of Queensland
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- Central Electricity Authority - India
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