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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, 22 May 09
INDONESIA`S BUKIT ASAM TO HAVE POWER PLANT IN 2011 - ANTARA
The construction of a power plant in South Sumatra by coal mining company PT Tambang Batubara Bukit Asam will be completed in April 2011.
T ...
Friday, 22 May 09
NOBLE WINS CONTROL OF AUSTRALIA'S GLOUCESTER COAL - BLOOMBERG
Noble Group Ltd., a Hong Kong- based commodity supplier, won control of Australia’s Gloucester Coal Ltd. after last week raising its cash bid ...
Thursday, 21 May 09
FBR STARTS COVERAGE OF SHIPPING SECTOR - REUTERS
Friedman Billings Ramsey began coverage of the shipping industry, saying the sector, which is amidst a deep cyclical downturn, is poised for a recov ...
Thursday, 21 May 09
INDONESIAN COAL PRODUCTION IN Q1 BELOW TARGET - STEEL GURU
Mr Bambang Gatot Ariyono director for coal and mineral development at the Energy and Mineral Resources Ministry said that the coal production in the ...
Wednesday, 20 May 09
COAL & OIL BAGS TWO CONTRACTS TO SUPPLY COAL TO CEMENT & SUGAR INDUSTRY IN INDIA
COALspot.com: According to website of Coal & Oil Company, Aditya Birla Group (Ultratech) have placed orders with Coal and Oil Company for supply ...
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- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Planning Commission, India
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Indian Energy Exchange, India
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kobexindo Tractors - Indoneisa
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Mines - Canada
- Jorong Barutama Greston.PT - Indonesia
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- SMG Consultants - Indonesia
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- New Zealand Coal & Carbon
- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- Kumho Petrochemical, South Korea
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Samtan Co., Ltd - South Korea
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- Central Java Power - Indonesia
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
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