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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, 23 September 09
TATA POWER TO COMMISSION 2 UNITS OF MUNDRA UMPP BY FEB 2012
Business Standard reported that, the country's largest private power producer Tata Power today said it would commission 1,600 MW capacity of its 4, ...
Wednesday, 23 September 09
NAVA BHARAT TO ADD 300MW CAPACITY, RAISE RS1,386 CRORE (US$ 289,674,610)
The firm plans to place orders for equipment by the end of October and commission both the plants by April 2012 to sell power in the open market
...
Tuesday, 22 September 09
ASIA COAL-PRICES TOPS $70 AS TRADERS SEEK BARGAINS
Reuters reported that, prices of power-station coal in Australia, a benchmark for Asia, rose for the second week to top $70 a tonne this week, clawi ...
Tuesday, 22 September 09
QINHUANGDAO COAL PRICES SURGE ON STRONG DEMAND
People's Daily Online reported that, Coal prices at Qinhuangdao port, China's largest coal port, witnessed the sharpest increase in the year last ...
Tuesday, 22 September 09
SHORT PERIOD RATE FOR SUPRAMAX WAS AROUND US$ 17,000 PER DAY FOR VESSELS OPENING FAR EAST / SE ASIA - VISTAAR
COALspot.com (Singapore): The dry bulk market continued to be stable with the BDI just dropping by about 5 pct to 2,356 points last week. The change ...
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- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- Orica Mining Services - Indonesia
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- VISA Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Economic Council, Georgia
- Planning Commission, India
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- Africa Commodities Group - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Indika Energy - Indonesia
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Makarim & Taira - Indonesia
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Electricity Generating Authority of Thailand
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