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