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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, 13 October 09
INDIA INTERESTED IN AMERICAN COAL
UPI reported that, Coal India Ltd. in its global expansion efforts is now interested in coal properties in the United States.
The Business Standard ...
Tuesday, 13 October 09
RIVERSDALE MAY USE ZAMBEZI RIVER TO TRANSPORT MOZAMBIQUE COAL
Mining Weekly reported that, ASX-listed coal-miner Riversdale Mining would submit a feasibility study and an environmental-impact study (EIS) for it ...
Monday, 12 October 09
INDONESIAN COAL MINER SAYS PLANS IPO IN 2010
Reuters reported that, Indonesian coal miner PT Bhakti Energi Persada plans an initial public offering in the first quarter of 2010 to develop coal ...
Monday, 12 October 09
BISICHI MINING FINALIZES COAL SUPPLY CONTRACT FOR 2010-2012
Small Cap News reported that, Bisichi, the South Africa based coal mining group, has agreed a three year coal supply contract between its principal ...
Monday, 12 October 09
SHANDUKA BUYS SACMH RICHARDS BAY COAL ALLOCATION
* Shanduka Coal takes SACMH 500,000T export space
* RBCT must approve any change of ownership
Reuters reported that, South Africa's Shanduka Co ...
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- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- The University of Queensland
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Planning Commission, India
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- White Energy Company Limited
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- Aditya Birla Group - India
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Mercator Lines Limited - India
- Madhucon Powers Ltd - India
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- IHS Mccloskey Coal Group - USA
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