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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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Monday, 04 October 10
2 BLN TONS OF COAL RESERVES DISCOVERED IN SOUTHERN PAKISTAN - XINHUA / HELLENIC SHIPPING
Xinhua and Hellenic Shipping reporte dhtat, the discovery of at least two billion tons of usable coal reserves has been confirmed in one of the ...
Sunday, 03 October 10
THE BDI WAS JUST INCREASED BY 8 POINTS AND CLOSED AT 2452 POINTS LAST FRIDAY - VISTAAR
COALspot.com: The BDI was almost at same levels and just increased by 8 points and closed at 2452 points , however the cape index was up by al ...
Sunday, 03 October 10
NALCO TO FINALIZE INDONESIA COAL DEAL BY JANUARY - HINDUSTAN TIMES
HindustanTimes reported that, state-owned National Aluminium Company (NALCO) will finalise a deal with a coal source in Indonesia for its $4 billion ...
Sunday, 03 October 10
INDONESIA WILL BECOME A NET IMPORTER OF ENERGY IN 2030 - BPPT
Jakarta Updates reported that,Indonesian Agency for the Assessment and Application of Technology (BPPT) predicted that the energy situation in Indon ...
Saturday, 02 October 10
FOUR INDONESIAN COAL FIRMS KEEN TO TIE UP WITH NALCO - SIFY
Sify reported that, Four Indonesian coal companies have shown interest to tie up with public sector National Aluminium Company (Nalco) for its 4 bil ...
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- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Dalmia Cement Bharat India
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Lanco Infratech Ltd - India
- SMC Global Power, Philippines
- Marubeni Corporation - India
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ambuja Cements Ltd - India
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- Ind-Barath Power Infra Limited - India
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- Sree Jayajothi Cements Limited - India
- Singapore Mercantile Exchange
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Trasteel International SA, Italy
- VISA Power Limited - India
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- Wood Mackenzie - Singapore
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- The University of Queensland
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Vedanta Resources Plc - India
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