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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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Thursday, 01 April 10
PROFIT AT TWO INDONESIAN COAL MINERS SOARS AS RECOVERY STIRS GREATER DEMAND, HIGHER PRICES - THE JAKARTA GLOBE
The Jakarta Globe reported that, Two of the country’s biggest coal producers enjoyed a surge in profit last year as prices rose and demand pic ...
Thursday, 01 April 10
BHP BILLITON TO SELL STAKE IN MARUWAI TO ADARO - THE JAKARTA POST
The Jakarta Posted reported that, BHP Billiton has agreed to sell 25 percent of its stake in the Maruwai Coal Project in Kalimantan to Indonesia&rsq ...
Thursday, 01 April 10
AUSTRALIAN COAL PRODUCER REJECTS $3 BILLION PEABODY OFFER - STL TODAY
STL today reported that, Australian coal producer Macarthur Coal Ltd. rejected a $3 billion cash takeover bid from Peabody Energy Corp., which seeks ...
Thursday, 01 April 10
TATA POWER EYES MORE COAL FROM INDONESIA FOR ITS FUTURE PLANTS - FINANCIAL EXPRESS
Financial Expressreported that, Tata Power, one of the largest private sector power utilities in the country with interests in generation, transmiss ...
Wednesday, 31 March 10
COAL INDIA MULLS JOINT VENTURE WITH RIO TINTO AND PEABODY - DNA
DNA reported that, Coal India Ltd. (CIL) has finalised two key contenders for its international joint venture (JV) in Australian and US each. The co ...
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- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- The University of Queensland
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Vedanta Resources Plc - India
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Romanian Commodities Exchange
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- GMR Energy Limited - India
- Renaissance Capital - South Africa
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- Banpu Public Company Limited - Thailand
- Borneo Indobara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Power Finance Corporation Ltd., India
- CNBM International Corporation - China
- Australian Coal Association
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Sical Logistics Limited - India
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Maharashtra Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- Toyota Tsusho Corporation, Japan
- International Coal Ventures Pvt Ltd - India
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Electricity Generating Authority of Thailand
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- Minerals Council of Australia
- London Commodity Brokers - England
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