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