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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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Thursday, 11 November 21
ASIA COAL POWER PIPELINE TO SHRINK BY TWO THIRDS AFTER CHINA FINANCE CUT - REUTERS
Asia’s pipeline of proposed coal-fired power plants is expected to shrink from 65 gigawatts to 22 gigawatts following China’s pledge to ...
Tuesday, 09 November 21
ASIA-PACIFIC IS HOME TO SOME OF THE WORLD'S LARGEST CARBON-EMITTERS - 2 CHARTS SHOW ITS RELIANCE ON COAL - CNBC
Asia-Pacific is home to some of the world’s largest carbon emitters — and experts say much of global efforts to fight climate change de ...
Tuesday, 09 November 21
CHINA DAILY COAL OUTPUT HITS MULTI-YEAR PEAK, PRICES EXPECTED TO FALL - REUTERS
China’s daily coal output hit 11.93 million tonnes last week, a multi-year high as more capacity returned to operation, the state planner sai ...
Thursday, 04 November 21
CHINA'S COAL MARKET SEES SIGNIFICANT IMPROVEMENTS: NDRC - GLOBAL TIMES
China’s top economic planner has declared initial success in its efforts to ensure coal supply and stabilize prices, saying that daily coal o ...
Thursday, 04 November 21
CHINA THERMAL COAL PRICES RISE AFTER FALLING FOR 10 DAYS - REUTERS
China thermal coal futures rebounded on Wednesday after falling for 10 days on an expected jump in fuel demand to meet heating needs amid forecasts ...
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- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Australian Coal Association
- Semirara Mining and Power Corporation, Philippines
- VISA Power Limited - India
- Sakthi Sugars Limited - India
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- The Treasury - Australian Government
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Star Paper Mills Limited - India
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhatia International Limited - India
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- European Bulk Services B.V. - Netherlands
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Mercator Lines Limited - India
- White Energy Company Limited
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Malabar Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Pendopo Energi Batubara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Rio Tinto Coal - Australia
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Gujarat Mineral Development Corp Ltd - India
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