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