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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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Wednesday, 01 April 09
COAL FIRMS' PROFITS NOT EXPECTED TO GROW IN '09 - - THE JAKARTA POST (ANALYSTS)
Despite their windfall profits in 2008, analysts doubt that PT Bumi Resources Tbk or any other coal firms will post profit growth this year, with pr ...
Tuesday, 31 March 09
DEUTSCHE BANK TO ADD COAL, GAS, SHIPPING IN COMMODITY EXPANSION - BLOOMBERG
Deutsche Bank AG, after quadrupling revenue from commodities in two years, plans to add coal, European natural-gas and shipping to its business, ant ...
Monday, 30 March 09
CHINA SHENHUA SAYS AGREES DOMESTIC COAL DEALS - REUTERS
Chinese coal mining giant China Shenhua Energy Co has agreed long-term contracts with some Chinese power producers, its President Ling Wen said on M ...
Sunday, 29 March 09
SHENHUA ENERGY 2008 NET RISES 29% TO RECORD ON PRICES - BLOOMBERG
China Shenhua Energy Co Ltd., the nation’s biggest coal producer, said profit rose 29 percent to a record in 2008 after it increased productio ...
Friday, 27 March 09
SOUTH AFRICAN COAL EXPORTS EXPECTED TO RISE IN 2009, BUT RAIL WILL DETERMINE BY HOW MUCH - MININGWEEKLY
South Africa has an expanding coal-export terminal, but an uncertain rail capacity.
The mismatch is something South Africa cannot afford, given i ...
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- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- PTC India Limited - India
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Energy Link Ltd, New Zealand
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- Planning Commission, India
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- CNBM International Corporation - China
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- Straits Asia Resources Limited - Singapore
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- Vizag Seaport Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- Australian Coal Association
- Parliament of New Zealand
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- White Energy Company Limited
- London Commodity Brokers - England
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
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