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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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Tuesday, 21 April 09
INDONESIAN GOVT TO ALLOW UNDERGROUND MINING IN PROTECTED FORESTS - THE JAKARTA POST
The government will issue a regulation allowing mining companies to carry out underground mining in protected forests.
"This regulation will ...
Tuesday, 21 April 09
INDONESIAN GOVT LIKELY TO MISS INVESTMENT TARGETS FOR ENERGY, MINING - THE JAKARTA POST
The total value of investments in energy and mining sectors by the end of the year is likely to be below the government’s target, as a result of ...
Monday, 20 April 09
INDONESIAN COAL MINING ASSOCIATION CALLED TO CONTROL MINERS - MAJALA TAMBANG
The Indonesian Coal Mining Association (ICMA) is called to expand its membership further in view of controlling the conduct of miners in the nationa ...
Monday, 20 April 09
BANPU PLANS TO SHIP 2 MLN T COAL TO CHINA IN 09 - REUTERS
Banpu, Thailand's largest coal miner, plans to increase coal shipments to China by about 30 percent to 2 million tonnes in 2009, company officials ...
Monday, 20 April 09
INDO TAMBANGRAYA 2009 OUTPUT TO GO UP 16% - THE JAKARTA POST
Indonesia's third largest coal producer, publicly listed PT Indo Tambangraya Megah (ITM), is targeting to raise production by 16 percent this year ...
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- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- Eastern Energy - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- ASAPP Information Group - India
- AsiaOL BioFuels Corp., Philippines
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Planning Commission, India
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- Meenaskhi Energy Private Limited - India
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Deloitte Consulting - India
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- Global Green Power PLC Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Star Paper Mills Limited - India
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
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