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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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Thursday, 24 December 09
EUROSEAS LTD. ANNOUNCES TWO-YEAR TIME CHARTER AGREEMENT FOR PANAMAX BULK CARRIER
Euroseas Ltd., an owner and operator of drybulk carriers and container vessels and provider of seaborne transportation for dry bulk and containerize ...
Wednesday, 23 December 09
INDONESIA POWER CHIEF TO BUILD PLANTS OUTSIDE JAVA
Indonesia's state electricity firm plans to build new power plants outside Java island with a combined capacity of around 2,000 megawatts to resolv ...
Wednesday, 23 December 09
BUKIT ASAM SEES CHINA COAL DEMAND BOOST
* Rebound in prices to have pushed up 2009 revs
* To more than double Tarahan port capacity
Reuters reported that, Indonesian state-owned coal m ...
Wednesday, 23 December 09
MACARTHUR COAL OFFERS TO BUY RIVAL GLOUCESTER
Queensland-based Macarthur Coal will offer to buy fellow Australian Gloucester Coal, in a move to add two new mines and increase coal resources.
...
Tuesday, 22 December 09
CHINA CONTRACTED COAL PRICE FOR 2010 SEES SLIGHT INCREASE
A number of coal and power enterprises have concluded their annual power-coal supply contracts for 2010, and the contracted coal price saw slight in ...
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- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Jindal Steel & Power Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- South Luzon Thermal Energy Corporation
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- PTC India Limited - India
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Thiess Contractors Indonesia
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Australian Coal Association
- Energy Development Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- GVK Power & Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
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