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