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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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Tuesday, 15 January 13
GRANT SMITH APPOINTED GROUP MANAGING DIRECTOR OF BRAEMAR ADJUSTING
The Board of Braemar Adjusting is delighted to announce the appointment of Grant Smith as Group Managing Director of the company with immediate effe ...
Tuesday, 15 January 13
2ND MYANMAR MINING SUMMIT & OFFICIAL HOST MINISTRY OF MINES TO WELCOME OVER 200 DELEGATES NEXT WEEK
Press Release: The Ministry of Mines is hosting the 2nd Myanmar Mining Summit in Yangon on 21-24 January to unravel the local mining climate, prospe ...
Monday, 14 January 13
NEWCASTLE PORT SHIPPED 2.32 PERCENT LESS COAL W/E 14 JANUARY 2013
COALspot.com - Newcastle port in Australia has loaded 3,123,312 MT of thermal and coking coal for week ended 0700 hours 14 January 2013, Newca ...
Monday, 14 January 13
THE COAL MONGOLIA - 2013 OFFICIALLY IN COOPERATION WITH TOP MINING COMPANIES
Press Release: Mongolian first mining portal site Mining.mn has already started its preparation of the International Conference “COAL MONGOLIA ...
Monday, 14 January 13
NTPC INVITES BIDS FOR 500K MT OF IMPORTED COAL
COALspot.com - NTPC Limited (formerly National Thermal Power Corporation) is the largest Indian state-owned electric utilities company called for a ...
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- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- Thai Mozambique Logistica
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Ministry of Finance - Indonesia
- PTC India Limited - India
- Ministry of Mines - Canada
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Gujarat Sidhee Cement - India
- Antam Resourcindo - Indonesia
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- The University of Queensland
- Bhushan Steel Limited - India
- Australian Coal Association
- Singapore Mercantile Exchange
- European Bulk Services B.V. - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Planning Commission, India
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Lanco Infratech Ltd - India
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- ASAPP Information Group - India
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- Commonwealth Bank - Australia
- McConnell Dowell - Australia
- Larsen & Toubro Limited - India
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Kartika Selabumi Mining - Indonesia
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
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