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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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Wednesday, 11 August 10
BANPU SECURES TAKEOVER LOAN - BANGKOK POST
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, has secured loans worth US$2 billion from Thai and foreign banks to proceed with ...
Tuesday, 10 August 10
KOREA'S EWP TO BUY 4 MILLION TON OF 3700 AND 4600 NAR COAL AT FIXED PRICE
COALspot.com: Korean utility East-West Power out with the tender to buy 0.670 million tons with a minimum calorific value of 4600 NAR and 0.350 mill ...
Tuesday, 10 August 10
COAL CONSTRAINS CORE SECTOR GROWTH IN JUNE 2010
Growth in the six key infrastructure sectors decelerated for the third month in June. This is primarily due to last year’s high base effect. D ...
Sunday, 08 August 10
SOUTH AFRICA INCREASES COAL EXPORTS TO INDIA BY 74% IN JULY, TRADER SAYS
South Africa’s Richards Bay, the continent’s largest coal terminal, increased sales to India by 74 percent in July from June, according ...
Saturday, 07 August 10
INDIAN COAL IMPORTS WILL PLAY AN IMPORTANT PART IN KEEPING THE FREIGHT MARKET FIRM IN FUTURE - VISTAAR
COALspot.com: The freight market was volatile with market ending firmed and the BDI crossing 2000 points up by 3 pct, however the BCI was up by 14 p ...
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- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Wilmar Investment Holdings
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- Planning Commission, India
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- Minerals Council of Australia
- Eastern Coal Council - USA
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Electricity Authority - India
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- Globalindo Alam Lestari - Indonesia
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Bukit Makmur.PT - Indonesia
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Siam City Cement - Thailand
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
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