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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, 12 June 09
THERMAL COAL PRICE REMAINS STABLE IN SHANXI - STEEL GURU
It is reported that coming into June, no major changes are seen in coal supply-demand relations in Shanxi province. Statistics of Qinhuangdao port, ...
Thursday, 11 June 09
PT NALCO PLANS TO CONSTRUCT COAL-FIRED POWER PLANT IN SOUTH SUMATRA - ENERGY BUSINESS REVIEW
PT Nalco (National Aluminium Company Limited), an Indian-based company, plans to construct a coal-fired power plant in South Sumatra. The company in ...
Thursday, 11 June 09
COAL PRODUCERS TO SEE BOOST IN DEMAND FROM ASIA PACIFIC - JAKARTA POST
The Jakarta Post reported that, at the recent 15th Coaltrans conference in Bali, we noted concerns related to rising oil prices at a faster pace tha ...
Wednesday, 10 June 09
BHP TO CUT 450 JOBS AT INDONESIAN COAL PROJECT - REUTERS
Reuters reported that, BHP Billiton Ltd will lay off all 450 workers at its Indonesian coal project after deciding not to go ahead with the pr ...
Monday, 08 June 09
PTC INDIA TO ACQUIRE COAL MINES IN AUSTRALIA, INDONESIA - PTI NEWS
PTI reported that, State-owned Power Trading Corp today said it would acquire coal properties overseas and has identified mines in Australia and Ind ...
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- Standard Chartered Bank - UAE
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Sarangani Energy Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- Indian Oil Corporation Limited
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Indo Tambangraya Megah - Indonesia
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Rio Tinto Coal - Australia
- Manunggal Multi Energi - Indonesia
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- Mercator Lines Limited - India
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- White Energy Company Limited
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- McConnell Dowell - Australia
- GN Power Mariveles Coal Plant, Philippines
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
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