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