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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, 24 July 09
INDIA TAKES 9 MILLION TONNES S. AFRICAN COAL JAN - JUNE
Reuters reported that, India accounted for nearly 9 million tonnes of South Africa's January-June exports of around 28 million tonnes, industry sour ...
Thursday, 23 July 09
KOMIPO LAUNCHES TWO COAL TENDERS
Korea Midland Power on Wednesday launched two tenders to procure bituminous or semi-anthracite coal for August to September delivery. Bids close on J ...
Thursday, 23 July 09
GUANGDONG BUYERS SET TO IMPORT 2.3 MILLION MT FROM VIETNAM - MEDIA
Several coal-consuming companies in China’s Guangdong Province, headed by Guangdong Yudean Group (Guangdong Power Generation Group), have inke ...
Thursday, 23 July 09
KEPCO BUYS 1.5% STAKE IN ADARO ENERGY FOR US$ 56.5M
WSJ reported that, state-run utility Korea Electric Power Corp., or Kepco, Thursday said it has acquired a 1.5% stake in Indonesian coal miner, PT A ...
Thursday, 23 July 09
INDONESIA COAL-PRICES CLIMB TO $80, INDIAN DEMAND SLOWS
Reuters reported that, prices of power-station coal in Australia, a benchmark for Asia, jumped to nearly $80 a tonne this week, while Indonesi ...
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- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- Anglo American - United Kingdom
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Leighton Contractors Pty Ltd - Australia
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Wilmar Investment Holdings
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Australian Coal Association
- Sojitz Corporation - Japan
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- The University of Queensland
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Planning Commission, India
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Indika Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
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