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