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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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Friday, 28 August 09
JSW MAY BUY AFRICAN MINE FOR US$ 350
The Economic Times Reported that, The Sajjan Jindal-owned JSW Group is in advanced talks to acquire a coal mine in Swaziland, Africa, at an estimate ...
Friday, 28 August 09
COAL INDIA ALLOWED TO IMPORT COKING COAL
The government Thursday allowed the state-owned Coal India to import coking coal and high grade ash thermal coal by acquiring coal properties abroad ...
Thursday, 27 August 09
CIL TO SPEND US$ 1 - 1.5 BN TO ACQUIRE ASSETS IN 4 COUNTRIES
Business Standard reported that, "Coal India is looking to spend $1-1.5 billion in acquiring mining assets in Australia, Indonesia, South Afric ...
Wednesday, 26 August 09
INDIA'S JSW TO DOUBLE JAIGARH PORT CAPACITY TO 20 MT
Sea Trade Asia reported that, JSW Jaigarh Port, a wholly owned subsidiary of JSW Infrastructure & Logistics, plans to double cargo handling capa ...
Wednesday, 26 August 09
JSW ENERGY NEARS COAL-SUPPLY LINKAGE DEAL IN INDONESIA
Sajjan Jindal-owned JSW Energy is close to finalising a coal-supply linkage pact in Indonesia and is also exploring options of acquiring ...
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- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- Standard Chartered Bank - UAE
- Heidelberg Cement - Germany
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- The University of Queensland
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Madhucon Powers Ltd - India
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Siam City Cement PLC, Thailand
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
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