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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, 16 December 09
COAL MARKETS 2010 CONFERENCE - PRESS RELEASE
COALspot.com (Singapore) Press Release – Back for the 8th year, Coal Markets 2010 will be taking place in Singapore on 28 – 29 Jan ...
Wednesday, 16 December 09
CHINA 2010 COAL TERM PRICES SEEN RISING 8% ON YEAR
Term prices of thermal coal for 2010 in China are expected to rise about 8 percent from this year's levels, as demand for power has been roaring ba ...
Wednesday, 16 December 09
KANGAROO RESOURCES TO ACQUIRE INDONESIAN COAL INTERESTS
Emerging coal producer Kangaroo Resources has significantly enhanced its production pipeline in Indonesia after reaching agreement to acquire a coki ...
Wednesday, 16 December 09
UAE'S RAS AL KHAIMAH TO INVEST $5.2B IN EAST KALIMANTAN PROJECT
Shrugging off neighbor Dubai’s debt problems, the smaller United Arab Emirate of Ras Al Khaimah announced on Tuesday that it would increase it ...
Wednesday, 16 December 09
COECLERICI EYES SECOND RUSSIA COAL MINE
* CEO says "seriously considering" mid-small size purchase
* Will use mine to increase exports to Asia
* Says delays at ports will not c ...
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- New Zealand Coal & Carbon
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- India Bulls Power Limited - India
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Coalindo Energy - Indonesia
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- Minerals Council of Australia
- London Commodity Brokers - England
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Ministry of Transport, Egypt
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