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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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Tuesday, 23 August 11
PENRHYN COAL USING EVERGREEN ENERGYS COAL UPGRADING PROCESS
Evergreen Energy Inc has announced the successful testing results of the initial batches of Penrhyn coal using Evergreen Energy’s coal upgradi ...
Tuesday, 23 August 11
A SHARP INCREASE IN THE BDI - BRS
A sharp increase in the BDI this week, driven by the rise in Capesize rates. Overall the BDI was up 13.5% to 1,462 points on the back of a 20% surge ...
Monday, 22 August 11
INDONESIA TO BAN BELOW 5700 KCAL/KG COAL FOR EXPORT
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia is in the process of drafting a regulation which is requiring mine owners ...
Monday, 22 August 11
JATENERGY AGREED TO FORM JV WITH AN INDONESIAN COAL MINING COMPANY
COALspot.com - Australian’s listed company, Jatenergy Limited has entered conditional agreement to form joint venture with Indonesia’s c ...
Monday, 22 August 11
NTPC TO IMPORT 16 MILLION TON OF COAL TO BRIDGE THE GAP
COALspot.com - NTPC to import 16 million tons of imported coal, which is equivalent to 23-24 million tons of Indian coal to bridge the gap.
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- VISA Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- Merrill Lynch Commodities Europe
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Petron Corporation, Philippines
- Romanian Commodities Exchange
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Vizag Seaport Private Limited - India
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- ICICI Bank Limited - India
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- Borneo Indobara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- Meralco Power Generation, Philippines
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