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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, 22 November 23
INDIA: GOVERNMENT PLANS 1.4 BILLION TONNE COAL OUTPUT BY 2027 - LIVEMINT
The Union coal ministry on Monday announced plans to increase India’s coal production to 1.404 billion tonne by 2027, with an eye to further ...
Wednesday, 22 November 23
OBLIGATION. INDONESIA AIMS TO START COLLECTING LEVIES FROM COAL MINERS IN JANUARY - REUTERS
Indonesia plans to start collecting levies from coal miners in January to be used to compensate miners who sell coal to the state utility at lower ...
Tuesday, 21 November 23
INDIAN COAL POWER PLANTS’ CAPACITY UTILISATION WILL IMPROVE TO 65% THIS FISCAL: - CRISIL
Coal-based thermal power units’ plant load factor (PLF) or capacity utilisation will improve to 65 percent in the current fiscal year despite ...
Tuesday, 14 November 23
CAPITAL PRODUCT PARTNERS L.P. ANNOUNCES TRANSFORMATIVE TRANSACTION INCLUDING THE ACQUISITION OF 11 NEWBUILD LNG CARRIERS FOR $3.1 BILLION
Capital Product Partners L.P. announced that it has entered into an umbrella agreement (the “Umbrella Agreement”) with Capital Maritime ...
Tuesday, 14 November 23
COAL INDIA BEATS Q2 PROFIT VIEW ON HIGH POWER DEMAND AMID WEAK MONSOON - REUTERS
Coal India on Friday reported better-than-expected second-quarter profit, helped by high power demand and boosted production amid a weak monsoon.
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- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Power Finance Corporation Ltd., India
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- Electricity Authority, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Aditya Birla Group - India
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Orica Mining Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- GMR Energy Limited - India
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- Planning Commission, India
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- Australian Coal Association
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Antam Resourcindo - Indonesia
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Heidelberg Cement - Germany
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
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