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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, 15 May 09
INDIKA EXPECTS TO INCREASE COAL PRODUCTION BY 12.68% IN 2010 - THE JAKARTA POST
ENERGY and infrastructure company PT Indika Energy, the parent company of Indonesia's third largest coal producer PT Kideco Jaya Agung, expects its ...
Thursday, 14 May 09
INDONESIA 2009 COAL OUTPUT REVISED DOWN - REUTERS
* Indonesia coal output seen at 240 million tonnes in 2009
* Coal exports down 11.2 pct to 44.79 mln tonnes in Q1 2009
* Production down 1.4 pct t ...
Thursday, 14 May 09
PAKISTAN WILL IMPORT 3.2 MILLION TON OF COAL IN 2009 - SEATRADE
COALspot.com (Pakistan) - SEATRADE Group of pakistan a single largest imported coal supplier in Pakistan, forecasting Pakistan steam coal imports wi ...
Wednesday, 13 May 09
ADARO, ITM EXPECT COAL GROWTH IN 2009
Adaro, which has a market capitalization of $3.64 billion, sells to 48 customers in 18 countries worldwide, including power utilities Thai Power and ...
Wednesday, 13 May 09
COAL SUPPLY MAY BE VASTLY OVERESTIMATED - ABC SCIENCE
The world's coal supply suggests reserves may be vastly overestimated and we could be facing an unprecedented global energy crisis, according to a ...
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- Indika Energy - Indonesia
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Kumho Petrochemical, South Korea
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- Bangladesh Power Developement Board
- Formosa Plastics Group - Taiwan
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Makarim & Taira - Indonesia
- White Energy Company Limited
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Bharathi Cement Corporation - India
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- Aboitiz Power Corporation - Philippines
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Development Corp, Philippines
- The University of Queensland
- Singapore Mercantile Exchange
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
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