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