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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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Tuesday, 22 December 09
NEWCASTLE COAL SHIP QUEUE LONGEST IN TWO YEARS AS EXPORTS SLOW
Bloomberg reported that, the queue of coal ships waiting at Australia’s Newcastle port, the world’s biggest export harbor for the fuel, ...
Monday, 21 December 09
INDONESIA HAS EXPORTED AROUND 195.303 MILLION TONS OF COAL TILL END OF NOVEMBER 2009
COALspot.com (Indonesia): China has been the largest single buyer of Indonesian coal in November 2009, by taking 28.69% of total exported quan ...
Monday, 21 December 09
RUSSIAN COAL MINER SUEK EYES '10 LONDON IPO
* Company valued at around $8-$9 bln - banking source
* IPO could take place in H1 - source
* May list 25 pct of share capital - report
Reuters ...
Monday, 21 December 09
IGCC OUTLOOK CHINA 2010 TO BE HELD IN APRIL 2010 IN SHANGHAI
COALspot.com (China): Press Release - Aiming at unveiling the growth area of IGCC polygeneration, IGCC Outlook China 2010 is planned to be hel ...
Sunday, 20 December 09
GLOBAL COAL MAJORS MAKE THEIR PRESENTATIONS
Major energy companies from four countries, including the U.S., Indonesia and South Africa, have completed detailed presentations before a committee ...
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- Edison Trading Spa - Italy
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Rashtriya Ispat Nigam Limited - India
- Sical Logistics Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Lanco Infratech Ltd - India
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Aditya Birla Group - India
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Malabar Cements Ltd - India
- Planning Commission, India
- Semirara Mining Corp, Philippines
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