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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, 19 August 10
INDONESIA EXPORTED 5.93 MLN TON OF COAL TO CHINA AND 3.52 MLN TONS TO INDIA IN JULY
COALspot.com: Indonesia shipped 3.52 million tones of thermal coal to India in July, fell 25.39 percent compared to June's exports of 4.71 million ...
Thursday, 19 August 10
WBPDCL INDIA LAUNCHES SPOT COAL TENDER
COALspot.com: The West Bengal Power Development Corporation Limited (WBPDCL ), A Govt. of West Bengal Enterprise, has launched spot contract tender ...
Thursday, 19 August 10
PANAMAX BACKED BY A STRONGER SHORT PERIOD MARKET AND SUPPORTED BY SOME FRESH REQUIREMENTS - FEARNBULK
Handy
The events of this week have confirmed our assessment of last week i.e. activity gradually picked up in the Atlantic with more enquiry seen ...
Thursday, 19 August 10
CSC TO SHIP COAL FOR NOROCHCHOLAI POWER PLANT
Daily Mirror reported that, coal for the Norochcholai Power Plant will be shipped to the country by the Ceylon Shipping Corporation (CSC) officials ...
Wednesday, 18 August 10
MADHUCON TO START MINING AT SUMATRA BLOCK IN 2-3 MONTHS
DNA India reported that, Hyderabad-based Madhucon Projects is set to begin mining at one of its coal blocks in Indonesia in 2-3 months, said S Vaiku ...
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- LBH Netherlands Bv - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Binh Thuan Hamico - Vietnam
- ASAPP Information Group - India
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- India Bulls Power Limited - India
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cement Manufacturers Association - India
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
- Marubeni Corporation - India
- Posco Energy - South Korea
- Kepco SPC Power Corporation, Philippines
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- Samtan Co., Ltd - South Korea
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- PowerSource Philippines DevCo
- Leighton Contractors Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- The University of Queensland
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Commonwealth Bank - Australia
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
- Makarim & Taira - Indonesia
- White Energy Company Limited
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- Vedanta Resources Plc - India
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
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