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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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Friday, 13 February 09
INDONESIA IS EXPECTED TO PRODUCE 225 MILLION TONES OF COAL IN 2009 - ENERGY MINISTRY
Indonesia, the world's top thermal coal exporter, will allocate 68.3 million tonnes of coal out of expected forecast production of 225 million ton ...
Friday, 06 February 09
INDONESIA'S COAL PORTS HAVE FORCED A RETHINK ON 'TRADITIONAL' HANDLING OPTIONS
Port Strategy reported that, Indonesia’s main coal-producing islands of Kalimantan, Sulawesi and Sumatra suffer from a scarcity of suitable la ...
Thursday, 22 January 09
MINISTER: MINING LAW PROHIBITS RAW MATERIAL EXPORT - ESDM
The Coal and Mining Law, approved during the House of Representatives plenary meeting on December 16, 2008 seeks to domestically increase mining com ...
Wednesday, 07 January 09
SOUTH KALIMANTAN COAL PRODUCTION EXPECTED TO INCREASE - ESDM
Coal production from the South Kalimantan region has the potential to increase in the next few years. Aside from the vast proven reserves of coal, s ...
Tuesday, 30 November 99
GLENCORE EXPECTS 2023 TRADING UNIT PROFITS OF UP TO $4 BLN - REUTERS
Glencore GLEN.L on Friday said it expects profits at its trading division this year of up to $4 billion, exceeding its long-term annual guidance.
...
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- Economic Council, Georgia
- Bukit Asam (Persero) Tbk - Indonesia
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Bharathi Cement Corporation - India
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- ASAPP Information Group - India
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Aditya Birla Group - India
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- The University of Queensland
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Uttam Galva Steels Limited - India
- Australian Commodity Traders Exchange
- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Energy Link Ltd, New Zealand
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Australian Coal Association
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- OPG Power Generation Pvt Ltd - India
- Parry Sugars Refinery, India
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
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