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