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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, 13 June 09
CLEARLY THE DRIVER FOR DRY BULK MARKET SEEMS TO BE IMPORTS BY CHINA - VISTAAR SINGAPORE
COALspot.com (Singapore): The market saw mixed results last week. The beginning of the week saw the indices dropping including the futures , however t ...
Friday, 12 June 09
SOUTH SUMATERA SPEEDS UP INTERNATIONAL HARBOR CONSTRUCTION - TEMPO INTERACTIVE
The South Sumatera Government will speed up construction of the international harbor Tanjung Api-Api. The harbor is a strategic entry point for comm ...
Friday, 12 June 09
CHINA SHENHUA NOT EYEING NEW FOREIGN COAL MINES - MEDIA
China Shenhua Energy Co Ltd , the top Chinese coal miner, will not consider buying any major overseas mines before it starts operating the Watermark ...
Friday, 12 June 09
CHINA TOP POWER COS SIGN REGIONAL COAL DEALS - REUTERS
China's top five power generating groups have signed 2009 coal supply contracts with miners in Guizhou and Xinjiang, with prices up 4 percent on th ...
Friday, 12 June 09
MERCATOR LINES TARGETS 30 MILLION TONNE FROM MOZAMBIQUE COAL MINE - STEEL GURU
India’s second largest private shipping company Mercator Lines has targeted production of 30 million tonnes of coal from its Mozambique mine o ...
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- PTC India Limited - India
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- The University of Queensland
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- IEA Clean Coal Centre - UK
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Commonwealth Bank - Australia
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Economic Council, Georgia
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- PowerSource Philippines DevCo
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- Mercuria Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Planning Commission, India
- Thiess Contractors Indonesia
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Carbofer General Trading SA - India
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- Bharathi Cement Corporation - India
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
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