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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, 22 November 23
INDIA: GOVERNMENT PLANS 1.4 BILLION TONNE COAL OUTPUT BY 2027 - LIVEMINT
The Union coal ministry on Monday announced plans to increase India’s coal production to 1.404 billion tonne by 2027, with an eye to further ...
Wednesday, 22 November 23
OBLIGATION. INDONESIA AIMS TO START COLLECTING LEVIES FROM COAL MINERS IN JANUARY - REUTERS
Indonesia plans to start collecting levies from coal miners in January to be used to compensate miners who sell coal to the state utility at lower ...
Tuesday, 21 November 23
INDIAN COAL POWER PLANTS’ CAPACITY UTILISATION WILL IMPROVE TO 65% THIS FISCAL: - CRISIL
Coal-based thermal power units’ plant load factor (PLF) or capacity utilisation will improve to 65 percent in the current fiscal year despite ...
Tuesday, 14 November 23
CAPITAL PRODUCT PARTNERS L.P. ANNOUNCES TRANSFORMATIVE TRANSACTION INCLUDING THE ACQUISITION OF 11 NEWBUILD LNG CARRIERS FOR $3.1 BILLION
Capital Product Partners L.P. announced that it has entered into an umbrella agreement (the “Umbrella Agreement”) with Capital Maritime ...
Tuesday, 14 November 23
COAL INDIA BEATS Q2 PROFIT VIEW ON HIGH POWER DEMAND AMID WEAK MONSOON - REUTERS
Coal India on Friday reported better-than-expected second-quarter profit, helped by high power demand and boosted production amid a weak monsoon.
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- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Barasentosa Lestari - Indonesia
- Planning Commission, India
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Medco Energi Mining Internasional
- Rashtriya Ispat Nigam Limited - India
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- SMG Consultants - Indonesia
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Attock Cement Pakistan Limited
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- Carbofer General Trading SA - India
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Posco Energy - South Korea
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Orica Mining Services - Indonesia
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- Sree Jayajothi Cements Limited - India
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Indian Oil Corporation Limited
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- ICICI Bank Limited - India
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