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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, 22 September 09
AUSTRALIA SEES HIGHER ASIAN THERMAL COAL IMPORTS
* Asia '09 imports to rise 3.5%, vs pvs f'cast of 3.3% fall
* Asia 2010 thermal coal imports expected to rise 6.3 pct
* China to become net im ...
Tuesday, 22 September 09
PANAMA CANAL EXPANSION MAY AID COLOMBIA COAL TO ASIA
* Colombia producers hope for growth in Asia shipments
* Panama Canal will allow smaller coal Capesize vessels
* Australia, Indonesia to remain bi ...
Monday, 21 September 09
ACCC SET TO APPROVE NEWCASTLE COAL SHIPPING AGREEMENT
ABC reported that, The competition regulator says it is likely to approve a new agreement over coal loading arrangements at Newcastle.
Australian ...
Friday, 18 September 09
PEABODY ENERGY ESTABLISHES ASIAN COAL TRADING HUB IN SINGAPORE
Peabody Energy announced it has opened an office in Singapore that will serve as the new hub for Peabody COALTRADE International activities in South ...
Friday, 18 September 09
AUSTRALIA NEWCASTLE COAL PORT: SEEKS INTERIM QUOTA SYSTEM
Reuters reported that, Australia's Newcastle coal terminal wants to re-introduce an interim export quota system after a group of miners led by BHP ...
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- Sindya Power Generating Company Private Ltd
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Sakthi Sugars Limited - India
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Singapore Mercantile Exchange
- Planning Commission, India
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- White Energy Company Limited
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Bhatia International Limited - India
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- The University of Queensland
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- LBH Netherlands Bv - Netherlands
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
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