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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, 08 May 09
INDONESIAN STATE AUDIT BOARD COULD ONLY REACHED A SMALL NUMBER OF KP AND PKP2B - MAJALAHTAMBANG
THE LACK of personnel and the very limited time period have been the reasons why the 2nd semester of the special purpose audit for coal mining ...
Friday, 08 May 09
B.C.'S MINING INDUSTRY HIGH COAL PRICES TO RECORD 2008 PROFITS - PAGUNTAKA
AGGREGATE pre-tax earnings rose to $3.2 billion, the highest amount in the 41-year history of a PricewaterhouseCoppers survey.
B.C.’s minin ...
Thursday, 07 May 09
ASIA COAL-PRICES EASE TO NEAR $63 ON DEMAND CONCERNS - REUTERS
AUSTRALIAN thermal coal prices, a benchmark for Asia, edged lower to around $63 a tonne on concerns over demand, after hitting a two-week high of $6 ...
Thursday, 07 May 09
RICHARDS BAY COAL SHIPMENTS FALL MOST IN 9 MONTHS - BLOOMBERG
RICHARDS BAY Coal Terminal Ltd., Africa’s largest coal-export facility, said shipments fell 24 percent last month, the biggest drop in nine mo ...
Tuesday, 05 May 09
NEWCASTLE PORT'S WEEKLY COAL EXPORTS INCREASE - BLOOMBERG
COAL shipments from Australia’s Newcastle port, the world’s biggest export harbor for the fuel, rose 18 percent last week while the numb ...
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- Global Green Power PLC Corporation, Philippines
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- Essar Steel Hazira Ltd - India
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- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
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- Bhatia International Limited - India
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
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- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- ICICI Bank Limited - India
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- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
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- Rio Tinto Coal - Australia
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- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Australian Coal Association
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- IEA Clean Coal Centre - UK
- Anglo American - United Kingdom
- PTC India Limited - India
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
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- Edison Trading Spa - Italy
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- New Zealand Coal & Carbon
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- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- The University of Queensland
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
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- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
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- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- Marubeni Corporation - India
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
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- Star Paper Mills Limited - India
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- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Ministry of Transport, Egypt
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- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Altura Mining Limited, Indonesia
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- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
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- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
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- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- GVK Power & Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
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- Goldman Sachs - Singapore
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
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