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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, 26 August 09
COAL INDIA MAY HIKE COAL PRICES BY UP TO RS 175 (ABOUT US$ 3.60) A TONNE
The Economic Times reported that, state-owned Coal India may hike coal prices by up to Rs 175 (~ US$ 3.60) a tonne to close the gap between domestic ...
Tuesday, 25 August 09
KOREA TO INTRODUCE COAL-MINING ROBOTS TO REDUCE THE RISK OF HUMAN LOSSES FROM CONVENTIONAL MINING
Far East Gizmos reported that, The state-run Korea Coal Corp. (KOCOAL) signed a memorandum of understanding (MOU) on Monday with three Korean engine ...
Tuesday, 25 August 09
INDIA'S GNFC EXTENDED ONLINE BIDDING FOR PURCHASE OF 260,000 T COAL TO 23RD SEPTEMBER 2009
COALspot.com (India): Gujarat Narmada Valley Fertilizers Co. Ltd. (GNFC) invites offers (e-Tender) for supply of 130,000 MT +/- 5% on firm basis and ...
Tuesday, 25 August 09
ANTAM CONSIDERS ACQUIRING BHP
The Jakarta Post reported that, State mining company PT Aneka Tambang (Antam) is contemplating acquiring BHP Billiton's coal concessions in Central ...
Tuesday, 25 August 09
COAL OUTPUT TO RISE IN H2 BUT EXPORTS TO GO FLAT
The leading english news paper in Indonesia reported that, It is estimated coal production will rise by 5.7 percent in the second semester from a ye ...
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- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Deloitte Consulting - India
- The University of Queensland
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Australian Coal Association
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- South Luzon Thermal Energy Corporation
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Rashtriya Ispat Nigam Limited - India
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Georgia Ports Authority, United States
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Minerals Council of Australia
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Economic Council, Georgia
- ASAPP Information Group - India
- Intertek Mineral Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- Electricity Authority, New Zealand
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
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