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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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Wednesday, 10 February 10
ANGLO AMERICAN TIPS COAL PRICE RISE AFTER RAIN, AUSTRALIAN SAYS
Anglo American Plc expects coking coal contract prices to rise after weeks of heavy rain in Queensland state cut output by as much as 10 million met ...
Wednesday, 10 February 10
KANGAROO RESOURCES COMMENCES MINING AT MAMAHAK COKING COAL PROJECT
International coal producer Kangaroo Resources has kicked off mining at its second Indonesian coal operation, the Mamahak Coking Coal Project in Eas ...
Wednesday, 10 February 10
CHINA DENIES CLIVE PALMER'S COAL DEAL
ONE of China's biggest government-owned companies yesterday repudiated mining billionaire Clive Palmer for overstating what he said was Australia' ...
Tuesday, 09 February 10
INDIANS SAY SEEKING COAL BARGAINS VIA INDEX PRICES
* Indonesian cheaper than S.African - traders
* End-users wait for price falls before tendering
Indian coal traders responsible for the bulk of ...
Tuesday, 09 February 10
EURO COAL-PROMPT SLIDES WITH OIL PRICES
* April S.African cargo trades at $83.50/T FOB, unchanged
* April DES cargo trades at $74.75 a tonne, down $1/T
* Russia's Kuzbassrazrezugol sees ...
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- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Mercator Lines Limited - India
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- Eastern Energy - Thailand
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Georgia Ports Authority, United States
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Posco Energy - South Korea
- Kepco SPC Power Corporation, Philippines
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Rio Tinto Coal - Australia
- Sarangani Energy Corporation, Philippines
- Wood Mackenzie - Singapore
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- PTC India Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
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