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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, 30 January 10
THE ECI / CHINA (S7) ROUTE SOFTENED BY $ 5,736 AND CLOSED AT $ 27,360 PER DAY - VISTAAR SHIPPING
COALspot.com (Singapore): The freight market continued to soften this week probably in anticipation of Chinese New year holidays.
BDI INDEX
...
Saturday, 30 January 10
INDONESIA TO CONSTRUCT 93 POWER PLANTS IN 2ND PROJECT
The government has announced its list of 93 power plants to be built under the second 10,000-megawatt (MW) power generation scheme.
"With th ...
Saturday, 30 January 10
COAL FIRMS TO KEEP NATION IN THE BLACK
Some Indonesian coal mining companies on Friday pledged to allocate a greater share of their production this year to meet domestic market obligation ...
Friday, 29 January 10
INDIA STEAM COAL IMPORTS TO DOUBLE, BOOST SOUTH AFRICA
* SAfrica seen shipping 75 pct of its coal to Asia in 2010
* Logistics woes hamper SAfrica exports, India imports
India's steam coal imports ar ...
Thursday, 28 January 10
THE IRON ORE EXPORTS FROM INDIA TO CHINA ARE DOWN AND THE RATES DROPPED
HANDY
The BSI has continued its downward trend confirming the softening of the Atlantic since the previous week and reflecting a correction of the ...
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- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Siam City Cement - Thailand
- PTC India Limited - India
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Lanco Infratech Ltd - India
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Ministry of Transport, Egypt
- Port Waratah Coal Services - Australia
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- Sical Logistics Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Chamber of Mines of South Africa
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- Planning Commission, India
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Minerals Council of Australia
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Commonwealth Bank - Australia
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Karaikal Port Pvt Ltd - India
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Deloitte Consulting - India
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
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