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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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Friday, 26 June 09
BAYAN TARGETS GROSS PROFIT TO RISE BY 86.2 PERCENT
Local coal producer publicly listed PT Bayan Resources is targeting this year's gross profit to rise by 86.2 percent on the back of higher sales vo ...
Thursday, 25 June 09
INDIA'S ULTRATECH BUYS 500,000T S.AFRICA COAL
Indian cement maker Ultratech has bought 10 handymax cargoes of South African coal at $73.00-$74.00 a tonne CIF for July-September delivery, Indian ...
Wednesday, 24 June 09
NTPC BURNS MORE COAL TO PRODUCE ELECTRICITY
A tonne of coal is the same as another tonne of coal, you might think.
But power major NTPC Ltd is finding that this year’s coal is not yie ...
Wednesday, 24 June 09
NTPC, COAL INDIA TO BUY MINING ASSETS OVERSEAS
State-owned utility National Thermal Power Corporation (NTPC) and the largest coal producer Coal India are in advanced stages of acquiring mining as ...
Tuesday, 23 June 09
NEWCASTLE WEEKLY COAL EXPORTS DECREASE 15%; SHIP QUEUE RISES
Coal shipments from Australia’s Newcastle port, the world’s biggest export harbor for the fuel, fell 15 percent last week while the numb ...
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- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Timah Investasi Mineral - Indoneisa
- Rio Tinto Coal - Australia
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Eastern Energy - Thailand
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- The University of Queensland
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- Minerals Council of Australia
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Holcim Trading Pte Ltd - Singapore
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- MS Steel International - UAE
- White Energy Company Limited
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Indian Energy Exchange, India
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Riau Bara Harum - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
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