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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, 17 August 10
HANDIES AND SUPRAS WOKE UP AGAIN AFTER SEVERAL WEEKS OF LETHARGY - BRS
A spectacular increase in Cape size rates pushed the BDI up more than 20% this week, with demand for prompt tonnage in the Pacific causing a major s ...
Monday, 16 August 10
INDIA'S TNPL TO SUPPORT TNEB WITH COAL SUPPLIES
COALspot.com: TNPL to award 300,000 MT of coal supply contract to Nehel General Trading of India. Tamil Nadu state undertaking , Tamil N ...
Monday, 16 August 10
INDONESIA'S PLN SECURED COAL SUPPLIES, LESS IMPACT BY RAINS
COALspot.com: Indonesian State Electricity Company, PT Perusahaan Listrik Negara (PLN), has secured coal supplies for all of its power plants except ...
Sunday, 15 August 10
THE FREIGHT MARKET IS EXPECTED TO REMAIN FIRM - CAPT REDDY
COALspot.com: The BDI rose by almost 22 pct despite peak holiday season which is usually quite market , where as the BCI up sharply by 46 pct which ...
Saturday, 14 August 10
INDONESIAN THERMAL COAL PRICES EXPECTED TO MOVE UP IN SEPTEMBER 2010 - CHAIRMAN ICMA
COALspot.com: Indonesian Coal Mining Association is expecting, the Indonesian and international coal prices will increase, and will be reached ...
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- Economic Council, Georgia
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Intertek Mineral Services - Indonesia
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Singapore Mercantile Exchange
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Planning Commission, India
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Merrill Lynch Commodities Europe
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Australian Coal Association
- White Energy Company Limited
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Minerals Council of Australia
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Simpson Spence & Young - Indonesia
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Meenaskhi Energy Private Limited - India
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
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