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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, 27 January 10
PEABODY ENERGY EYES 'RED HOT' ASIAN COAL DEMAND
US miner Peabody Energy has seen already-strong Asian markets become “red hot”, as demand for metallurgical and thermal coal strains sup ...
Wednesday, 27 January 10
KOLKOTTA BASED POWER UTILITY CESC LOOKING FOR 100,000 MT OF COAL FOR MAY & JUNE DELIVERY
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Tuesday, 26 January 10
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The Decembe ...
Tuesday, 26 January 10
VITOL BUYS EXPORT SPACE AT COLOMBIA SANTA MARTA PORT
Global energy trader Vitol has signed a four-year deal to take export capacity at Colombia's 3 million tonnes a year Carbonsan port in Santa Marta, ...
Tuesday, 26 January 10
AUSTRALIAN FIRM TO MINE COAL IN WEST BENGAL
India Resources Ltd (IRL), a mining firm listed on the Australian Stock Exchange, has decided to enter into contract mining of coal in
India ...
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- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- MS Steel International - UAE
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- London Commodity Brokers - England
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Parliament of New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Gujarat Sidhee Cement - India
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Videocon Industries ltd - India
- White Energy Company Limited
- Singapore Mercantile Exchange
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Timah Investasi Mineral - Indoneisa
- Siam City Cement PLC, Thailand
- Krishnapatnam Port Company Ltd. - India
- Dalmia Cement Bharat India
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Carbofer General Trading SA - India
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Ministry of Mines - Canada
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Parry Sugars Refinery, India
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