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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
INDONESIA'S FIRST PRIVATE RAILWAY TO BOOST RAK'S MINING INTERESTS
MEC infra to invest $1b in construction of 130-km transport link
A 130-kilometre railway that will ease the transport of raw materials and finish ...
Tuesday, 15 December 09
KOMIPO HAS ISSUED A NEW TENDER FOR 30000 MT OF 5200 NAR KCAL/KG COAL
COALspot.com (South Korea): South Korean state-owned utility Korea Midland Power (KOMIPO) has issued an new tender for prompt supply of 30000 M ...
Tuesday, 15 December 09
CHINA CUTS IMPORT DUTIES ON COAL, RAISES FOR OTHERS
China will lower import duties on more than 600 products next year, including coal, naphtha and phosphate ore, the Finance Ministry said on Tuesday. ...
Tuesday, 15 December 09
NTPC'S COAL WOES UNLIKELY TO END SOON
State-owned power producer NTPC’s woes over shortages of coal may not end soon. Though the company is importing 12.5 million tonnes of coal&nb ...
Monday, 14 December 09
RICHARDS BAY COAL TO FINISH EXPANSION IN 1ST QUARTER
Richards Bay Coal Terminal, which ships more than a quarter of Europe’s energy coal, said it will complete its Phase 5 expansion project in th ...
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- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- Indogreen Group - Indonesia
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Electricity Generating Authority of Thailand
- PetroVietnam Power Coal Import and Supply Company
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Standard Chartered Bank - UAE
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Minerals Council of Australia
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Sakthi Sugars Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- PTC India Limited - India
- Cement Manufacturers Association - India
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Australian Coal Association
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- LBH Netherlands Bv - Netherlands
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- MS Steel International - UAE
- Marubeni Corporation - India
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
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