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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, 14 February 20
KOWEPO INVITED BIDS FOR 1.275 MILLION TONS OF MIN. 5,600 NCV COAL
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- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- SMG Consultants - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Essar Steel Hazira Ltd - India
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- Eastern Coal Council - USA
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Australian Coal Association
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Therma Luzon, Inc, Philippines
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Sinarmas Energy and Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- SN Aboitiz Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
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