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