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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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- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- White Energy Company Limited
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- VISA Power Limited - India
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Minerals Council of Australia
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Sinarmas Energy and Mining - Indonesia
- Energy Link Ltd, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Dalmia Cement Bharat India
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Planning Commission, India
- Indian Energy Exchange, India
- Australian Coal Association
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- Port Waratah Coal Services - Australia
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Miang Besar Coal Terminal - Indonesia
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- Energy Development Corp, Philippines
- Coal and Oil Company - UAE
- Binh Thuan Hamico - Vietnam
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- McConnell Dowell - Australia
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
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