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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, 26 July 11
UT'S SALES COULD REACH TO 8000 UNITS BY THE END OF 2011
COALspot.com - Sales of Komatsu heavy equipment in the domestic market in the first half of 2011 rose 59 percent to 4333 units compared to the same ...
Monday, 25 July 11
INDONESIA STATE ELECTRICITY COMPANY HAS BURNED 19 MMT OF COAL FOR FIRST HALF OF 2011
COALspot.com - Indonesia's State Electricity Company and other IPPs have burned 19 million tons of coal for first half of this year said,Pamudji Nu ...
Monday, 25 July 11
AKR CORPORINDO TO PRODUCE 0.3 MMT OF COAL BY DECEMBER
COALspot.com - PT AKR Corporindo (AKRA) began producing coal from its mine in Muara Teweh, Central Kalimantan. The company is targeting to pro ...
Sunday, 24 July 11
AN INDIAN PORT SETS A WORLD RECORD FOR CONVENTIONAL COAL DISCHARGE
COALspot.com - Krishnapatnam Port has set a World record for discharging 106,171 tons of steam coal in just 24 hrs using the conventional unloading sy ...
Saturday, 23 July 11
FAR EAST /SE ASIA ROUTE GAINED US$ 3000 HIGHER THAN LAST WEEK - VISTAAR
COALspot.com - The BDI further softened to by 2.22 pct and closed at 1323 points. The Cape and Panamax index also softened and closed at 1841 points ...
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- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- The University of Queensland
- Electricity Generating Authority of Thailand
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- Deloitte Consulting - India
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Siam City Cement - Thailand
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Savvy Resources Ltd - HongKong
- Makarim & Taira - Indonesia
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- GMR Energy Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- Parliament of New Zealand
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Petron Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
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