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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, 13 April 09
INDIA'S NTPC FOURTH-QUARTER PROFIT RISES 30% ON POWER OUTPUT - BLOOMBERG
NTPC Ltd., India’s biggest electricity generator, said profit rose 30 percent in the fourth quarter after higher efficiency helped production. ...
Thursday, 09 April 09
INDONESIAN CILACAP, FISHERMEN PROTEST COAL BARGES ANCHORING IN BAY - THE JAKARTA POST
Fishermen in Cilacap, Central Java, have protested against the presence of dozens of coal barges lying at anchor in Teluk Penyu Bay, claiming they a ...
Thursday, 09 April 09
INDONESIA'S PLN (STATE ELECTRICITY COMPANY) TO SET POWER PURCHASE PRICES FOR INDEPENDENT PRODUCERS - THE JAKARTA POST
State power company PT PLN holds the mandate to set power purchase prices to buy electricity produced by its (IPP) business partners, aiming at flex ...
Wednesday, 08 April 09
ARCELORMITTAL BUYS STAKE IN COAL OF AFRICA - MINEWEB
Steel maker, ArcelorMittal SA, has acquired a 16.3 percent stake in Coal of Africa Ltd. for $44.98 million in cash.
ArcelorMittal SA, the South A ...
Wednesday, 08 April 09
EXPORTS AT AUSTRALIA NEWCASTLE COAL PORT FALL ON STORM -MINING-JOURNAL
Coal exports from Australia's Newcastle port, the world's largest coal export terminal, fell roughly 18% last week to a 4½-month low, as ro ...
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- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- PTC India Limited - India
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- PNOC Exploration Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kepco SPC Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Economic Council, Georgia
- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Tata Chemicals Ltd - India
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Anglo American - United Kingdom
- London Commodity Brokers - England
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Australian Coal Association
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- VISA Power Limited - India
- Oldendorff Carriers - Singapore
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