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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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Saturday, 30 January 10
THE ECI / CHINA (S7) ROUTE SOFTENED BY $ 5,736 AND CLOSED AT $ 27,360 PER DAY - VISTAAR SHIPPING
COALspot.com (Singapore): The freight market continued to soften this week probably in anticipation of Chinese New year holidays.
BDI INDEX
...
Saturday, 30 January 10
INDONESIA TO CONSTRUCT 93 POWER PLANTS IN 2ND PROJECT
The government has announced its list of 93 power plants to be built under the second 10,000-megawatt (MW) power generation scheme.
"With th ...
Saturday, 30 January 10
COAL FIRMS TO KEEP NATION IN THE BLACK
Some Indonesian coal mining companies on Friday pledged to allocate a greater share of their production this year to meet domestic market obligation ...
Friday, 29 January 10
INDIA STEAM COAL IMPORTS TO DOUBLE, BOOST SOUTH AFRICA
* SAfrica seen shipping 75 pct of its coal to Asia in 2010
* Logistics woes hamper SAfrica exports, India imports
India's steam coal imports ar ...
Thursday, 28 January 10
THE IRON ORE EXPORTS FROM INDIA TO CHINA ARE DOWN AND THE RATES DROPPED
HANDY
The BSI has continued its downward trend confirming the softening of the Atlantic since the previous week and reflecting a correction of the ...
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- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Central Java Power - Indonesia
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- New Zealand Coal & Carbon
- Bhushan Steel Limited - India
- Australian Coal Association
- PNOC Exploration Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Sindya Power Generating Company Private Ltd
- Therma Luzon, Inc, Philippines
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Goldman Sachs - Singapore
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Bhatia International Limited - India
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
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