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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, 03 February 10
RECOVERY IN INDONESIAN MINING SECTOR EXPECTED TO BOOST SALES, UNITED TRACTORS SAYS
PT United Tractors, the country’s biggest supplier of heavy equipment, said on Tuesday that it expected sales to increase 15 percent this year ...
Tuesday, 02 February 10
THAI BANPU SAYS HIGHER COSTS TO HIT COAL PROFITS
Thailand's top coal miner, expects profits from its coal business in 2010 to be lower than last year due to higher costs, but its chief executive i ...
Monday, 01 February 10
CIL PLANS TO INVEST IN OVERSEAS COAL MINES
Over the next 10 years, CIL expects to import from these mines at least 500 million tonnes of thermal coal, a variety used by power plants
The bo ...
Sunday, 31 January 10
AUSTRALIA NEWCASTLE THERMAL COAL FALLS 0.7 PERCENT TO $ 98.53
Power-station coal prices at Australia’s Newcastle port, a benchmark for Asia, declined 0.7 percent, falling for the first time in four weeks. ...
Sunday, 31 January 10
NTPC TO IMPORT COAL
NTPC Ltd plans to import coal directly, starting next fiscal.
“We plan to import 15-16 million tonnes of coal directly from next year,&rdqu ...
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- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- Interocean Group of Companies - India
- Manunggal Multi Energi - Indonesia
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Parliament of New Zealand
- Indian Oil Corporation Limited
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Tata Chemicals Ltd - India
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Australian Coal Association
- CNBM International Corporation - China
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Petrochimia International Co. Ltd.- Taiwan
- MS Steel International - UAE
- ASAPP Information Group - India
- India Bulls Power Limited - India
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Star Paper Mills Limited - India
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Planning Commission, India
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- Directorate Of Revenue Intelligence - India
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