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