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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, 20 April 11
TNPL SECURED 160K MT OF COAL WITH CALORIFIC VALUE 6000 GAD AT US$ 93.44 PMT
COALspot.com - Delhi based Knowledge Infrastructure Systems Pvt. Ltd once again offered the lowest price of US$ 93.44 per metric ton for calorific v ...
Wednesday, 20 April 11
TSI LAUNCHES GEO-COAL UPGRADING TECHNOLOGY
Simple yet effective process boosts calorific value of low rank coal to provide lower cost energy across the world.
Press Release - Total Sinergy ...
Wednesday, 20 April 11
ADARO TO PAY OUT RP 970B IN DIVIDENDS - THE JAKARTA POST
The Jakarta Post reported that, the annual shareholders meeting of coal producer PT Adaro Energy on Wednesday agreed on the disbursement of Rp 970.7 ...
Wednesday, 20 April 11
INDIA IMPORTS MORE COAL FROM INDONESIA
COALspot.com - Indonesian coal exports jumped 23.31 percent during March 2011. The world’s largest coal exporter shipped 27, ...
Tuesday, 19 April 11
LONDON COMMODITY BROKERS OPENS JOHANNESBURG OFFICE
COALspot.com - London Commodity Brokers (LCB), a broking house specialising in bulk physical and Over-The-Counter commodities and options (coal ...
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- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Tata Chemicals Ltd - India
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Coal and Oil Company - UAE
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Cigading International Bulk Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- The University of Queensland
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Planning Commission, India
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- White Energy Company Limited
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
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