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