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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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Friday, 17 September 10
CWP COAL WASHING PLANTS MACHINERY LANDS ON RUSSIAN MARKET!!
Press Release: CWP Coal Washing Plants Machinery Industry & Trade Co. which was founded in 1990, has been operating in Izmir with its closed pro ...
Friday, 17 September 10
FREIGHT RATES TO DECLINE FURTHER - ICICI SEC
Broking firm ICICI Securities said tanker freight rates reported a sharp drop with rates of Suezmax and Aframax carriers declining by 16% to USD 8,6 ...
Friday, 17 September 10
R-POWER, ADANI, GMR TO BID FOR $1-BN MINE
Reliance Power, Adani Power and GMR are in the race for a coal mine asset in Australia. The valuation of the asset is close to $1 billion (Rs 4,600 ...
Thursday, 16 September 10
RPG GROUP BUYS 10% IN AUSSIE COAL FIRM RESOURCE GENERATION
Dealcurry reported that, India's RPG Group's Integrated Coal Mining Limited (ICML) has acquired 10% stake (18,268,053 shares) in Resource Generati ...
Wednesday, 15 September 10
VIETNAM TO IMPORT UP TO 15 MLN TONS COAL/YR BY 2015 - VIETNAM BUSINESS
Vietnam Business reported that, Vietnam will need to import 3 million to 15 million tons of coal a year by 2015, rising to 21 million to 40 million ...
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- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Tata Chemicals Ltd - India
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- McConnell Dowell - Australia
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Wilmar Investment Holdings
- Ministry of Transport, Egypt
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- VISA Power Limited - India
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Planning Commission, India
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Kobexindo Tractors - Indoneisa
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Interocean Group of Companies - India
- Directorate General of MIneral and Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Ind-Barath Power Infra Limited - India
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