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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, 21 July 10
FEWER SHIPS SOLD FOR SCRAP IN JUNE, ADDING PRESSURE TO FREIGHT RATES
The easing of vessel tonnage supply should be among the main concerns among ship owners, especially those active in dry bulk shipping. The reason is ...
Wednesday, 21 July 10
BUKIT ASAM SEALS RP900 BIO COAL DEAL
Souce: Insider Stories
Insider Stories reported that, State-Owned coal producer PT Tambang Batubara Bukit Asam Tbk (PTBA) have agreed t ...
Wednesday, 21 July 10
TUAH TURANGGA BUYS ABP US$ 15.9 MIO
Source: Insider Stories
Insider Stories reported that, Komatsu heavy equipment PT United Tractors Tbk (UNTR) through its wh ...
Tuesday, 20 July 10
CHINA'S RELIANCE ON COAL TO DROP 7% BY 2015 - XINHUA NET
Xinhua Net reported that, China's coal consumption is likely to drop to 63 percent of total energy consumption by 2015, down from 70 percent last y ...
Tuesday, 20 July 10
CHURCHILL PLANNING TO PRODUCE 35 MILLION TONNES PER ANNUM FROM ITS EAST KUTAI COAL PROJECT
According to Churchill's website, the East Kutai Coal Project is a world-class thermal coal deposit, with a JORC Mining Reserve of 961 milli ...
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- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Bhatia International Limited - India
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- Savvy Resources Ltd - HongKong
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Independent Power Producers Association of India
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- New Zealand Coal & Carbon
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Timah Investasi Mineral - Indoneisa
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
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