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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, 14 July 09
NEWCASTLE WEEKLY COAL EXPORTS RISE 11%; SHIP QUEUE DECREASES
Bloomberg reported that, Coal shipments from Australia’s Newcastle port, the world’s biggest export harbor for the fuel, gained 11 ...
Monday, 13 July 09
EXPORT COAL PRODUCTION FROM MOOIPLAATS COULD START IN NOVEMBER
Mining Weekly reported that, South Africa-focused emerging miner Coal of Africa (CoAL) has completed a revised mining layout for its Mooiplaats ...
Monday, 13 July 09
NAPOCOR AWARDS 195,000 T COAL TO INDONESIAN FIRMS
ABC-CBN News reported that, Philippine electricity producer National Power Corp (Napocor) has awarded 195,000 tons in coal supply contracts to two I ...
Monday, 13 July 09
PAKISTAN TO IMPORT ABOUT 2.4 MILLION TONS OF INDONESIAN COAL AND 1.6 MILLION TON OF SOUTH AFRICAN COAL WITHIN NEXT 12 MONTHS
COALspot.com (Pakistan) : Pakistan has exported well over 12 million tons of cement while local sales have dropped a bit with the result 33 million to ...
Monday, 13 July 09
COAL SECTOR IN VIETNAM INCREASE THE TARGET 43 MILLION TONNES THIS YEAR
Asian Mining Stock reported that, there was a change in a very good Coal Mining Industries Group (TKV) that Vietnam has decided to increase coa ...
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- Indonesian Coal Mining Association
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Central Java Power - Indonesia
- SMC Global Power, Philippines
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- White Energy Company Limited
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Mercator Lines Limited - India
- Tamil Nadu electricity Board
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Madhucon Powers Ltd - India
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Timah Investasi Mineral - Indoneisa
- Orica Australia Pty. Ltd.
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Planning Commission, India
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Africa Commodities Group - South Africa
- Wilmar Investment Holdings
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- VISA Power Limited - India
- Economic Council, Georgia
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
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