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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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Monday, 20 April 09
PT PAMAPERSADA SEES ITS REVENUE TO CLIMB BY 20% IN 2009 - STEELGURU
PT Pamapersada Nusantara, a unit of Indonesia's PT United Tractors, said that its 2009 profit will be similar to last year, even as it forecasts re ...
Monday, 20 April 09
NIPPON STEEL SEMI-SOFT COAL PRICE SAID TO DROP 67% - BLOOMBERG
Nippon Steel Corp., Japan’s largest mill, will pay up to 67 percent less for semi-soft coking coal this fiscal year, two industry executives w ...
Monday, 20 April 09
INTERNATIONAL INVESTORS SEEK TO SELL ADARO STAKES - MONEY.CNN
Some international investors in PT Adaro Energy ( ADRO.JK) have approached other companies to sell around a combined 17% stake in the coal miner via ...
Friday, 17 April 09
BHATIA COAL INDIA, VITOL IN DISPUTE - COAL JUNCTION
Bhatia Coal India, a subsidiary of the Bhatia International Group, terminated a coal supply contract with traders Vitol and has initiated arbitratio ...
Friday, 17 April 09
JSW TO BUY THERMAL COAL MINE IN AFRICA
Sajjan Jindal-led JSW Energy is close to acquiring a sub-Saharan African thermal coal mine, which has reserves of more than 200 million tons, to min ...
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- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Bukit Asam (Persero) Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- Malabar Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- The University of Queensland
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Mercuria Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Karbindo Abesyapradhi - Indoneisa
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Larsen & Toubro Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Meenaskhi Energy Private Limited - India
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Sojitz Corporation - Japan
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Economic Council, Georgia
- White Energy Company Limited
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bangladesh Power Developement Board
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
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