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