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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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Monday, 24 February 20
CHINA SAYS MAJOR COAL FIRMS RESTORE 95% OF PRODUCTION CAPACITY - REUTERS
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- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- ASAPP Information Group - India
- MS Steel International - UAE
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- San Jose City I Power Corp, Philippines
- Energy Link Ltd, New Zealand
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- White Energy Company Limited
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Australian Coal Association
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Planning Commission, India
- Parliament of New Zealand
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Sindya Power Generating Company Private Ltd
- Manunggal Multi Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Commonwealth Bank - Australia
- SMC Global Power, Philippines
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- Minerals Council of Australia
- PTC India Limited - India
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Barasentosa Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Alfred C Toepfer International GmbH - Germany
- Indonesian Coal Mining Association
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
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