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