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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, 16 March 09
COAL MINER BUKIT ASAM RECORDS 135% GAIN IN NET PROFIT FOR 2008 - THE JAKARTA GLOBE
Indonesia's state-owned coal miner PT Tambang Batubara Bukit Asam Tbk said its net profit jumped 135 percent last year, having sold more coal at hi ...
Saturday, 14 March 09
NATIONAL ALUMINIUM TO IMPORT COAL NEXT MONTH TO EASE SHORTAGE - BLOOMBERG
Bloomberg reported that, National Aluminium Co., India’s biggest alumina maker, plans to import as much as 150,000 metric tons of coal next mo ...
Friday, 13 March 09
VIETNAM APPROVES TWO COAL-FIRED POWER PLANTS TO MEET DEMAND -THANHNIENNEWS
Thanhnien News reported that, The government has approved a proposal to build two 2,400-megawatt coal-fired power plants in the provinces of Nam Din ...
Friday, 13 March 09
INDONESIAN STATE-RUN COMPANIES PROFIT MAY FALL 10% THIS YEAR -THANHNIENNEWS
Tanhnien news reported that, Indonesian state-run companies’ profits may fall about 10 percent this year as commodity prices decline, cutting ...
Thursday, 12 March 09
INDONESIA'S CIREBON ELEC IN TALKS ON COAL SUPPLIES - REUTERS
Reuters reported that, Indonesia's PT Cirebon Electric Power, an independent power producer, is in talks with a number of coal suppliers to seek a ...
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- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Central Java Power - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Simpson Spence & Young - Indonesia
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- Coalindo Energy - Indonesia
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Star Paper Mills Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Independent Power Producers Association of India
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Sree Jayajothi Cements Limited - India
- Planning Commission, India
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- ICICI Bank Limited - India
- Romanian Commodities Exchange
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- Tamil Nadu electricity Board
- Miang Besar Coal Terminal - Indonesia
- Videocon Industries ltd - India
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Coal Blending Company Limited - Australia
- MS Steel International - UAE
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Carbofer General Trading SA - India
- Karbindo Abesyapradhi - Indoneisa
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