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