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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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Thursday, 09 July 09
COAL AND OIL GROUP TO INVEST $300 MN TO BUY SHIPS AND ACQUIRE COAL MINE
Coal & Oil Group is planning to invest around $300 million (around Rs 1,500 crore) to buy new ships and to acquire coal mines. The company is pl ...
Thursday, 09 July 09
NO TRADE ON AUSTRALIA'S ASX COAL FUTURES DEBUT
*ASX's deliverable thermal coal futures debut without trade
*ASX says futures could present new arbitrage opportunities
The debut of Australia ...
Wednesday, 08 July 09
GERMAN COAL PRODUCTION DECREASED BY 31% TO ROUND 3.4 MILLION TON IN 1Q 2009 - COAL IMPORTERS ASSOCIATION, HAMBURG
COALspot.com (Germany):
World Coal Market
According to analysis of VEREIN DER KOHLENIMPORTEURE E.V. , On a quantity basis the s ...
Wednesday, 08 July 09
HUADIAN POWER BUYS INTO COAL MINERS
Huadian Power International Corporation - China's largest independent power producerCannounced Tuesday in a filing to the Shanghai Stock Exchange ...
Tuesday, 07 July 09
RICHARDS BAY TERMINAL COAL EXPORTS ROSE 7.2% IN JUNE
Richards Bay Coal Terminal Ltd., Africa’s largest coal-export facility, said shipments rose 7.2 percent in June from a year earlier.
Export ...
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- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Agrawal Coal Company - India
- Parliament of New Zealand
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- The University of Queensland
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- SMC Global Power, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cement Manufacturers Association - India
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
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