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