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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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Wednesday, 01 April 09
COAL FIRMS' PROFITS NOT EXPECTED TO GROW IN '09 - - THE JAKARTA POST (ANALYSTS)
Despite their windfall profits in 2008, analysts doubt that PT Bumi Resources Tbk or any other coal firms will post profit growth this year, with pr ...
Tuesday, 31 March 09
DEUTSCHE BANK TO ADD COAL, GAS, SHIPPING IN COMMODITY EXPANSION - BLOOMBERG
Deutsche Bank AG, after quadrupling revenue from commodities in two years, plans to add coal, European natural-gas and shipping to its business, ant ...
Monday, 30 March 09
CHINA SHENHUA SAYS AGREES DOMESTIC COAL DEALS - REUTERS
Chinese coal mining giant China Shenhua Energy Co has agreed long-term contracts with some Chinese power producers, its President Ling Wen said on M ...
Sunday, 29 March 09
SHENHUA ENERGY 2008 NET RISES 29% TO RECORD ON PRICES - BLOOMBERG
China Shenhua Energy Co Ltd., the nation’s biggest coal producer, said profit rose 29 percent to a record in 2008 after it increased productio ...
Friday, 27 March 09
SOUTH AFRICAN COAL EXPORTS EXPECTED TO RISE IN 2009, BUT RAIL WILL DETERMINE BY HOW MUCH - MININGWEEKLY
South Africa has an expanding coal-export terminal, but an uncertain rail capacity.
The mismatch is something South Africa cannot afford, given i ...
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- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Jindal Steel & Power Ltd - India
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Planning Commission, India
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- White Energy Company Limited
- Orica Mining Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- VISA Power Limited - India
- MS Steel International - UAE
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- Manunggal Multi Energi - Indonesia
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
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