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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, 18 March 09
MANILA'S NAPOCOR SAYS BIDDING FOR 100,000T COAL FAILS - REUTERS
Top Philippine electricityproducer National Power Corp (Napocor) was unable to secure 100,000 tonnes of local coal for one of its power plantsfollow ...
Wednesday, 18 March 09
INDONESIA'S PLN APPOINTS KPC TO SUPPLY COAL - REUTERS
State electricity firm Perusahaan Listrik Negara (PLN) appointed PT Kaltim Prima Coal to supply 1 million tonnes of coal per annum to Tanjung Jati B ...
Monday, 16 March 09
TATA POWER HAS NO PLAN TO SELL STAKE IN INDONESIA BUMI MINES - BLOOMBERG
Tata Power Co., India’s biggest electricity generator outside state control, said it has “no intention” to sell its stake in two I ...
Monday, 16 March 09
ANTAM SELECTS PARTNERS FOR POMALAA POWER PLANT - THE JAKARTA POST
PT Aneka Tambang Tbk, Indonesia’s second-largest nickel producer, said it intended to develop a $300 million coal-fired plant in Pomalaa, Sout ...
Monday, 16 March 09
ADARO TO BOLSTER SUPPLY CHAIN THROUGH ACQUISITIONS - THE JAKARTA POST
PT Adaro Energy Tbk, Indonesia's second-largest coal producer, plans to acquire a coal barging and transshipment company to improve its supply chai ...
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- Indika Energy - Indonesia
- GMR Energy Limited - India
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Videocon Industries ltd - India
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Banpu Public Company Limited - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Planning Commission, India
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- Coal and Oil Company - UAE
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
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