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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, 26 July 11
UT'S SALES COULD REACH TO 8000 UNITS BY THE END OF 2011
COALspot.com - Sales of Komatsu heavy equipment in the domestic market in the first half of 2011 rose 59 percent to 4333 units compared to the same ...
Monday, 25 July 11
INDONESIA STATE ELECTRICITY COMPANY HAS BURNED 19 MMT OF COAL FOR FIRST HALF OF 2011
COALspot.com - Indonesia's State Electricity Company and other IPPs have burned 19 million tons of coal for first half of this year said,Pamudji Nu ...
Monday, 25 July 11
AKR CORPORINDO TO PRODUCE 0.3 MMT OF COAL BY DECEMBER
COALspot.com - PT AKR Corporindo (AKRA) began producing coal from its mine in Muara Teweh, Central Kalimantan. The company is targeting to pro ...
Sunday, 24 July 11
AN INDIAN PORT SETS A WORLD RECORD FOR CONVENTIONAL COAL DISCHARGE
COALspot.com - Krishnapatnam Port has set a World record for discharging 106,171 tons of steam coal in just 24 hrs using the conventional unloading sy ...
Saturday, 23 July 11
FAR EAST /SE ASIA ROUTE GAINED US$ 3000 HIGHER THAN LAST WEEK - VISTAAR
COALspot.com - The BDI further softened to by 2.22 pct and closed at 1323 points. The Cape and Panamax index also softened and closed at 1841 points ...
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- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
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- Coastal Gujarat Power Limited - India
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
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- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Bhatia International Limited - India
- Power Finance Corporation Ltd., India
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- London Commodity Brokers - England
- White Energy Company Limited
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Economic Council, Georgia
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- Australian Coal Association
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Bukit Baiduri Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- GMR Energy Limited - India
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Jaiprakash Power Ventures ltd
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- The Treasury - Australian Government
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Formosa Plastics Group - Taiwan
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Planning Commission, India
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- CNBM International Corporation - China
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
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