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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, 12 August 20
THE COAL MARKET IN ITALY - ASSOCARBONI
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Wednesday, 12 August 20
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EIA expec ...
Tuesday, 11 August 20
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Monday, 10 August 20
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Saturday, 08 August 20
GLOBAL COAL POWER PUZZLE - BALTIC EXCHANGE
Global Energy Monitor’s latest Global Coal Plant Tracker has put another nail in the coffin for the coal-carrying fleet with its finding that ...
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- Metalloyd Limited - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
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- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement PLC, Thailand
- India Bulls Power Limited - India
- Minerals Council of Australia
- Sarangani Energy Corporation, Philippines
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
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- Jorong Barutama Greston.PT - Indonesia
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- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
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- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- Chamber of Mines of South Africa
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- Indian Energy Exchange, India
- Sakthi Sugars Limited - India
- ASAPP Information Group - India
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- London Commodity Brokers - England
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- White Energy Company Limited
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
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