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