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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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Thursday, 16 July 09
JAPAN'S J - POWER STARTS OPS AT NEW 600 MW COAL UNIT
Reuters, a worlds leading news agency reported that, Electric Power Development Co (J-Power) said on Thursday it started commercial operations at it ...
Thursday, 16 July 09
DELIVERY OF COAL MINE EXPLORATION THROUGH NEWCASTLE PORT ROSE 11 PERCENT
July 16th, 2009 Newcastle is a port in Australia that provides services in the delivery of coal from Australia to other countries. Newcastle port ha ...
Thursday, 16 July 09
CIL KEEN ON JOINT VENTURES
* Targets to raise production by 10 m tonnes by 2012
* Plans to tap reserves of abandoned mines
The Hindu, an Indian news paper reported that, t ...
Wednesday, 15 July 09
COAL INDIA INVITES EOI FOR COAL MINING IN FOREIGN COUNTRIES
Economict Tmes reported that, Coal India, a leading PSU with a status of Navratna, today, invited Expression of Interest for selection of strategic ...
Wednesday, 15 July 09
BANGLADESH TO IMPORT COAL FROM INDIA FOR 1 MORE YR
Bangladesh has decided to import coal from neighbour India for another year to save foreign exchange and time, a commerce ministry official said on ...
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- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Siam City Cement - Thailand
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- The University of Queensland
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Australian Coal Association
- Simpson Spence & Young - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Grasim Industreis Ltd - India
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- VISA Power Limited - India
- ICICI Bank Limited - India
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- Pendopo Energi Batubara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- Economic Council, Georgia
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Port Waratah Coal Services - Australia
- Orica Australia Pty. Ltd.
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
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