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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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Saturday, 25 April 09
KPC DEVELOPS EAST KALIMANTAN WITH GOVT - THE JAKARTA POST
Kaltim Prima Coal (KPC) focuses on several areas in its CSR projects to help the government increase the welfare of the community living around the ...
Friday, 24 April 09
NAPOCOR TO TENDER FOR 195,000 T COAL - ABS-CBNNEWS.COM
Top Philippine electricity producer National Power Corp. (Napocor) said on Friday it will hold a tender on May 20 to buy 195,000 tons of steam coal ...
Friday, 24 April 09
NTPC TO DELVE INTO CONTRACT MINING - ECONOMICTIMES
NTPC, India’s largest power producer, plans to cash in on its decades-old experience in handling coal mines by spinning off a separate u ...
Wednesday, 22 April 09
PROTECTED FORESTS FACING UNDERGROUND MINING THREAT - THE JAKARTA POST
The government is soon to issue a presidential regulation allowing mining companies to mine underground in protected forest areas, despite a recent ...
Tuesday, 21 April 09
MITRA RAJASA TO ACQUIRE TWO MINING COMPANIES - THE JAKARTA POST
PT Mitra Rajasa Tbk plans to acquire PT Realita Jaya Mandiri and PT Masindo Artha Resources in South Sumatra, which are worth around US$40 million.
...
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- Georgia Ports Authority, United States
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Savvy Resources Ltd - HongKong
- Global Coal Blending Company Limited - Australia
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- The University of Queensland
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Gujarat Sidhee Cement - India
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- Planning Commission, India
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Binh Thuan Hamico - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Australian Coal Association
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Wood Mackenzie - Singapore
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Kobexindo Tractors - Indoneisa
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
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