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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, 11 August 09
ZAMBIAN COAL BUYERS CONTINUE IMPORTING COAL FROM ZIMBABWE
Lusaka Times reported that, Coal mining companies have bemoaned the lack of market for their produce as prospective buyers continue importing the co ...
Monday, 10 August 09
NOMINAL HIKE IN COAL PRICES SOON - MEDIA
The hindu business reported that, a marginal hike in coal prices is in the offing. "I will be soon approaching the Prime Minister on the matter ...
Monday, 10 August 09
MANGALAM CEMENT PLACES ORDER FOR CAPTIVE POWER PLANT
Steel Guru reported that, Mangalam Cement Ltd has announced that the company on August 6th 2009 finalized order for Captive Thermal Power Plant of 1 ...
Monday, 10 August 09
VIET NAM COAL EXPORTS HIT 13.5 MILLION TONNES
VietNamNet Bridge reported that, Viet Nam exported more than 13.5 million tonnes of coal in the first seven months of this year, equal to the same p ...
Monday, 10 August 09
S.KOREA KOSPO ISSUES SPOT, TERM COAL TENDERS
Korea Southern Power Co Ltd (KOSPO) is seeking 1.5 million tonnes of steam coal per year for delivery from October 2009 through September 2012 via a ...
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- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- PetroVietnam Power Coal Import and Supply Company
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- Indo Tambangraya Megah - Indonesia
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Lanco Infratech Ltd - India
- Binh Thuan Hamico - Vietnam
- Ambuja Cements Ltd - India
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- Salva Resources Pvt Ltd - India
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Xindia Steels Limited - India
- ASAPP Information Group - India
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Renaissance Capital - South Africa
- White Energy Company Limited
- Parliament of New Zealand
- Australian Coal Association
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- The University of Queensland
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parry Sugars Refinery, India
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Coalindo Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
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