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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, 17 December 09
THE 6TH CLEAN ENERGY FORUM - CLEAN COAL 2010
COALspot.com (China) - Press Release: The 6th Clean Energy Forum--Clean Coal 2010 January 27-29, 2010 Renaissance Tianjin Teda Hotel And Conven ...
Thursday, 17 December 09
JFE STEEL INVESTS $555 MILLION IN AUSTRALIA COAL MINE
JFE Steel Corp., Japan’s second- largest producer, will invest 50 billion yen ($555 million) in a coal mine in Queensland, Australia, includin ...
Thursday, 17 December 09
CHINA, INDIA DEMAND MAY BOOST THERMAL COAL PRICE, JPMORGAN SAYS
Demand for thermal coal from China and India may boost prices of the fuel to $80 a metric ton next year amid reduced supplies and lower inventories, ...
Thursday, 17 December 09
RBCT PROBLEMS TO CAUSE STEAM COAL PRICE SPIKE IN Q1
Bugs in the new computer system at South Africa's Richards Bay Coal Terminal and persistent rail problems will make it impossible for exporters to ...
Thursday, 17 December 09
CIL TO IMPORT 4 MILLION TONNES COAL FOR NTPC
The country's largest coal miner Coal India Ltd (CIL) will import 4 million tonnes of coal for state-run power company NTPC.
"Earlier, ther ...
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- Grasim Industreis Ltd - India
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- Interocean Group of Companies - India
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- Edison Trading Spa - Italy
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- The University of Queensland
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- White Energy Company Limited
- Indian Energy Exchange, India
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ambuja Cements Ltd - India
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Planning Commission, India
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Mercator Lines Limited - India
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- McConnell Dowell - Australia
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
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