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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, 13 February 09
INDONESIA IS EXPECTED TO PRODUCE 225 MILLION TONES OF COAL IN 2009 - ENERGY MINISTRY
Indonesia, the world's top thermal coal exporter, will allocate 68.3 million tonnes of coal out of expected forecast production of 225 million ton ...
Friday, 06 February 09
INDONESIA'S COAL PORTS HAVE FORCED A RETHINK ON 'TRADITIONAL' HANDLING OPTIONS
Port Strategy reported that, Indonesia’s main coal-producing islands of Kalimantan, Sulawesi and Sumatra suffer from a scarcity of suitable la ...
Thursday, 22 January 09
MINISTER: MINING LAW PROHIBITS RAW MATERIAL EXPORT - ESDM
The Coal and Mining Law, approved during the House of Representatives plenary meeting on December 16, 2008 seeks to domestically increase mining com ...
Wednesday, 07 January 09
SOUTH KALIMANTAN COAL PRODUCTION EXPECTED TO INCREASE - ESDM
Coal production from the South Kalimantan region has the potential to increase in the next few years. Aside from the vast proven reserves of coal, s ...
Tuesday, 30 November 99
GLENCORE EXPECTS 2023 TRADING UNIT PROFITS OF UP TO $4 BLN - REUTERS
Glencore GLEN.L on Friday said it expects profits at its trading division this year of up to $4 billion, exceeding its long-term annual guidance.
...
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- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Renaissance Capital - South Africa
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Mintek Dendrill Indonesia
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- Simpson Spence & Young - Indonesia
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Singapore Mercantile Exchange
- Georgia Ports Authority, United States
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- India Bulls Power Limited - India
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Borneo Indobara - Indonesia
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- Grasim Industreis Ltd - India
- Ambuja Cements Ltd - India
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
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