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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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Saturday, 08 January 11
AUSTRALIAN FLOODS MAY BOOST RIS COAL SALES - THE JAKARTA POST
The Jakarta Post reported that, Floods inundating Queensland have disrupted Australian coal production, and in turn may offer opportunities for Indo ...
Saturday, 08 January 11
GOVERNMENT REMAINS CAUTIOUS OVER FOREIGN INVESTMENT IN MINING SECTOR - THE JAKARTA GLOBE
The Jakarta Globe reported that, The government expects $3.2 billion of investment to flow into the mining sector this year as foreign investors tur ...
Friday, 07 January 11
14 LARGE-SCALE COAL BASES TO BE BUILT DURING 12TH FIVE-YEAR PLAN - GLOBAL TIMES
During the Twelfth Five-Year Plan period (2011-2015), China aims to build 14 large-scale coal bases, and annex and restructure 20 coal bases in orde ...
Friday, 07 January 11
JSW ENERGY LTD OF INDIA IS LOOKING FOR 45 MILLION TONS OF STEAM COAL FOR 25 YEARS
COALspot.com - Supply of 1.80 mmt (+/- 10%) of steam coal per annum for power plants at Toranagallu and Jaigad.
Accordign to JSWE's websit ...
Friday, 07 January 11
SRI LANKA NEW PORT TO OFFER SHIP FUEL IN MAY - LBO
LOB reported that, The Sri Lanka Ports Authority (SLPA) plans to start bunkering or ship fuel operations at a new port in southern Hambantota in May ...
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- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- Oldendorff Carriers - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Thiess Contractors Indonesia
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- PTC India Limited - India
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- White Energy Company Limited
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Ministry of Transport, Egypt
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- London Commodity Brokers - England
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Parliament of New Zealand
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Australian Coal Association
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Petron Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- Central Electricity Authority - India
- Kumho Petrochemical, South Korea
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
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