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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, 28 July 09
BUKIT ASAM ENJOYS STRONG FIRST HALF
The Jakarta Post reported that, state coal miner PT Tambang Batubara Bukit Asam (PTBA) enjoyed a strong first half performance with six-month net pr ...
Tuesday, 28 July 09
NEWCASTLE LOADED 1.943 MILLION TONS OF COAL IN THE WEEK ENDED 27TH JULY 2009
COALspot.com (Singapore) : The volume exported from Australia’s Newcastle port in the week ended - 07:00 hours 27 July 2009 ...
Monday, 27 July 09
INDIA PAYING HIGHEST PRICE FOR S.AFRICA COAL - PRODUCERS
* Spread between South African and Pacific origin coal very wide
* Lack of European buying makes India indicator of value
Reuters reported that, ...
Monday, 27 July 09
TAIWAN'S FORMOSA EYES S.AFRICAN COAL FOR Q4: TRADE
Reuters reported that, Taiwan's Formosa Plastics Group is looking to buy two South African thermal coal cargoes for delivery in the fourth-quarter, ...
Monday, 27 July 09
ADANI POWER'S $625 MILLION IPO TO GENERATE HOT DEMAND
WSJ reported that, Adani Power, the electricity generating unit of India's Adani Enterprises Ltd., is set raise up to US$625 million in wha ...
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- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Vedanta Resources Plc - India
- Intertek Mineral Services - Indonesia
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- White Energy Company Limited
- SMC Global Power, Philippines
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Indika Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Sakthi Sugars Limited - India
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Global Green Power PLC Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- Australian Coal Association
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Aditya Birla Group - India
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
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