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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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Thursday, 11 November 21
ASIA COAL POWER PIPELINE TO SHRINK BY TWO THIRDS AFTER CHINA FINANCE CUT - REUTERS
Asia’s pipeline of proposed coal-fired power plants is expected to shrink from 65 gigawatts to 22 gigawatts following China’s pledge to ...
Tuesday, 09 November 21
ASIA-PACIFIC IS HOME TO SOME OF THE WORLD'S LARGEST CARBON-EMITTERS - 2 CHARTS SHOW ITS RELIANCE ON COAL - CNBC
Asia-Pacific is home to some of the world’s largest carbon emitters — and experts say much of global efforts to fight climate change de ...
Tuesday, 09 November 21
CHINA DAILY COAL OUTPUT HITS MULTI-YEAR PEAK, PRICES EXPECTED TO FALL - REUTERS
China’s daily coal output hit 11.93 million tonnes last week, a multi-year high as more capacity returned to operation, the state planner sai ...
Thursday, 04 November 21
CHINA'S COAL MARKET SEES SIGNIFICANT IMPROVEMENTS: NDRC - GLOBAL TIMES
China’s top economic planner has declared initial success in its efforts to ensure coal supply and stabilize prices, saying that daily coal o ...
Thursday, 04 November 21
CHINA THERMAL COAL PRICES RISE AFTER FALLING FOR 10 DAYS - REUTERS
China thermal coal futures rebounded on Wednesday after falling for 10 days on an expected jump in fuel demand to meet heating needs amid forecasts ...
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- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Ambuja Cements Ltd - India
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Bhushan Steel Limited - India
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- The University of Queensland
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Dalmia Cement Bharat India
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Australian Coal Association
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Minerals Council of Australia
- ICICI Bank Limited - India
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- Planning Commission, India
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
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