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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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- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Grasim Industreis Ltd - India
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- McConnell Dowell - Australia
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- Interocean Group of Companies - India
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Trasteel International SA, Italy
- Marubeni Corporation - India
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Ministry of Mines - Canada
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- The University of Queensland
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- SN Aboitiz Power Inc, Philippines
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Orica Mining Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Australian Coal Association
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Parliament of New Zealand
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- MS Steel International - UAE
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- LBH Netherlands Bv - Netherlands
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
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