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