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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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Sunday, 07 March 10
SHIPS WERE FIXED AT AROUND US$ 16,000 PER DAY FOR TRIP VIA INDONESIA TO INDIA - CAPT. REDDY
COALspot.com: The freight market was quite buoyant this week and BDI was up by 18 pct . The Cape index up by 23.60 pct and Panamax index was up by 1 ...
Saturday, 06 March 10
ESSAR TO BUY US COAL FIRM FOR $550-600 MN
Business-Standard reported that, the Essar Group is close to buying Trinity Coal, one of the top 10 coal producers in the US, in a deal worth $550-6 ...
Friday, 05 March 10
KARNATAKA POWER SEEKS 900,000 TONS STEAMING COAL OVER 9 MONTHS
Bloomberg reported that, Karnataka Power Corp., an Indian electricity generator, is seeking to import 900,000 metric tons of steaming coal over nine ...
Friday, 05 March 10
COAL RALLY ON CHINESE DEMAND SPARKS $59 ESTIMATES
Bloomberg reportd that, A rally that has boosted coal prices 21 percent from their lows last year may have further to go as the coldest U.S. winter ...
Thursday, 04 March 10
BANPU KEEPS JORONG OUTPUT AT 2M TONNES
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, is maintaining an output target of 2 million tonnes this year from its Jorong mi ...
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- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- PTC India Limited - India
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Aditya Birla Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Economic Council, Georgia
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Indian Energy Exchange, India
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- Georgia Ports Authority, United States
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Lanco Infratech Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- Orica Mining Services - Indonesia
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Indian Oil Corporation Limited
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Energy Development Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
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