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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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Tuesday, 26 April 11
NTPC CALLS TENDER FOR 4 MLN TON OF NON-COKING COAL
COALspot.com - NTPC Limited, incorporated in 1975 as a public sector company wholly owned by Government of India, is the largest thermal power gener ...
Monday, 25 April 11
THE FUTURES FOR THREE YEARS WAS AT AROUND PANAMAX/US$ 14,000 PER DAY & SUPRAMAX/US$ 14,000 PER DAY - VISTAAR
COALspot.com - The freight market continued to soften further with all segments down except for the handy size which was marginally up by 10 points. ...
Saturday, 23 April 11
GUPTA COAL TO BAG ONE MILLION TONS OF COAL SUPPLY ORDER FROM KPCL AT AROUND US$ 127.53 PMT
COALspot.com - Karnataka Power Corporation (KPCL), a state utility of Karnataka, India has secured its one million tons of thermal coal with c ...
Saturday, 23 April 11
STRAITS ASIA SETS 11.5 MIO TONS OUTPUT - INSIDER STORIES
Insider Stories reported that, Singapore-listed Straits Asia Resources Limited plans to jack up its coal output target of 8.5% to 11.5 million tons ...
Friday, 22 April 11
DRY BULK MARKET KEEPS FALLING, NOW AT TWO-MONTH LOWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market seems unable at the moment to recover from the weight of newbuilding deliveries, resulting in too many ships competing for fewer ...
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- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Uttam Galva Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Planning Commission, India
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Indogreen Group - Indonesia
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Indian Energy Exchange, India
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- The University of Queensland
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- Price Waterhouse Coopers - Russia
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Australian Coal Association
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