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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, 30 December 13
INDONESIAN COAL TO BE PART OF INDEX DETERMINING POWER TARIFFS - BUSINESS STANDARD
In a significant move, power sector regulator CERC has decided to provide 50 per cent weightage for Indonesian coal in the benchmark index that is u ...
Friday, 27 December 13
THE EXPORT OF UNPROCESSED MINERALS WOULD NOT BE ALLOWED AFTER 12 JAN 2014 - INDONESIAN ENERGY MINISTER
COALspot.com: The government of Indonesia will implement Law No. 4 of 2009 on Mineral and Coal in full and consistently by January 12, 2014, said, m ...
Friday, 27 December 13
INDONESIA SHIPPED 15.75 PERCENT MORE COAL IN NOVEMBER
COALspot.com: Indonesia, the world's 4th largest coal producer and the largest multi grade coal exporter shipped over $2* billion worth of co ...
Thursday, 26 December 13
COAL & OIL GROUP SECURES US$ 250 MILLION FUNDING FOR ITS 1200MW THERMAL POWER PLANT IN INDIA
COALspot.com: Dubai-based Coal & Oil (C&O) Group has announced that it has secured additional funding of approximately Dhs. 1 billion (appro ...
Wednesday, 25 December 13
DRY BULK INDEX LOST SOME GROUND THIS PAST WEEK - INTERMODAL
Chartering (Wet: Firm+ / Dry: Softer - )
The Dry Bulk Index lost some ground this past week, on the back of activity slowing down befor ...
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- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- White Energy Company Limited
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- GMR Energy Limited - India
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Intertek Mineral Services - Indonesia
- Ministry of Finance - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Directorate Of Revenue Intelligence - India
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Planning Commission, India
- TNB Fuel Sdn Bhd - Malaysia
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Australian Coal Association
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