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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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- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Straits Asia Resources Limited - Singapore
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mintek Dendrill Indonesia
- The University of Queensland
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Toyota Tsusho Corporation, Japan
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sojitz Corporation - Japan
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- White Energy Company Limited
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- Sree Jayajothi Cements Limited - India
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- New Zealand Coal & Carbon
- Bukit Asam (Persero) Tbk - Indonesia
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
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