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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, 08 September 09
INDONESIA OFFERS AN OPPORTUNITY TO INDIANS
Meri News reported that, Indonesia is all set to launch the country's second 10,000 MW accelerated power expansion programme. The new power develop ...
Tuesday, 08 September 09
BUKIT ASAM AIMS 14 MLN TONS COAL PRODUCTION
VIVA News reported that, The rise in coal production is mainly triggered by the step-up in domestic demand.
Coal mining company PT Tambang Batuba ...
Tuesday, 08 September 09
MERCHANT BANKERS ADVISE CIL ON INDONESIAN MINE BUYS
Business Standard reported that, State-owned Coal India Ltd (CIL) is being advised by four to five merchant bankers on acquisition of coal assets in ...
Tuesday, 08 September 09
THE 3RD ASIA PACIFIC COAL TRADING & INVESTMENT OUTLOOK 2009 - PRESS RELEASE
The 3rd Asia Pacific Coal Trading & Investment Outlook 2009
Analysis of Asia Coal Market amid Global Financial Crisis
COALspot.com(Chin ...
Tuesday, 08 September 09
SOUTH AFRICAN COAL EXPORTS MAY RISE ON SALES TO INDIA
Bloomberg reported that, South African coal exports may rise to 100 million metric tons a year by 2020 and India may become the biggest destination ...
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- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Thai Mozambique Logistica
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Global Green Power PLC Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Planning Commission, India
- Attock Cement Pakistan Limited
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- Energy Link Ltd, New Zealand
- Minerals Council of Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- VISA Power Limited - India
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- The University of Queensland
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- SMC Global Power, Philippines
- Directorate Of Revenue Intelligence - India
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
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