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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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Monday, 20 July 09
INDONESIA PRODUCES 72 MILLION MT IN FIRST HALF OF YEAR: OFFICIAL
Indonesia produced 72 million mt of coal in the first half of 2009, or 31.3% of the government’s target this year, a senior government officia ...
Sunday, 19 July 09
JINDAL S&P IN TALKS TO BUY SA COAL MINE FOR RS 350-400 CR (US$ 80 - 90 MILLION)
Economic Times reported that, Naveen Jindal-led Jindal Steel & Power (JSPL) is acquiring a thermal coal mine in South Africa, a top company exec ...
Saturday, 18 July 09
REN POWER CZ COMMISSIONS ANOTHER PHOTOVOLTAIC POWER STATION
COALspot.com (Press Release): REN Power CZ, a company in the Czech Coal Group, has put into operation another photovoltaic power station. The plant ...
Saturday, 18 July 09
THE FUTURE FOR SUPRAMAX FOR NEXT 3 YEARS TILL 2012 WOULD BE AROUND US$ 13,500 PER DAY - CAPT. REDDY
COALspot.com ( Singapore): The market moved up sharply this week , which was quite unexpected.
The BDI was up by 557 which is an increase of 18 ...
Friday, 17 July 09
CHINA COAL-SPOT PRICES EDGE LOWER, SUPPLY APLENTY
China Mining reported that, spot prices in China's top coal shipping port Qinhuangdao edged lower from a week earlier, as supply grew, offsetting t ...
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- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- The University of Queensland
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Minerals Council of Australia
- Wilmar Investment Holdings
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Electricity Authority, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- Ministry of Transport, Egypt
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Australian Coal Association
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- ICICI Bank Limited - India
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Videocon Industries ltd - India
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- VISA Power Limited - India
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- Goldman Sachs - Singapore
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
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