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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, 16 September 09
NAPOCOR GETS 3 OFFERS IN COAL TENDER
ABS-CBN news reported that, The Philippines' state-run National Power Corp. (Napocor) said on Wednesday it received offers from 3 Indonesian firms ...
Wednesday, 16 September 09
S.KOREA KOSEP BUYS 1.06 MLN T COAL-SOURCE
* 6,080 kcal/kg at $63-65, 4,900-5,350 kcal/kg at $56-58
* Initially about 5 mln T offered for tender
Reuters reported that, Korea South ...
Tuesday, 15 September 09
CHINA COAL EXPORT ROSE M-O-M FOR THE STRAIGHT 3 MONTHS
Alibaba reported that, In the January-August period, China coal exports slid by 55.9% to 14.83mln tons month on month. In August, China exported 1.9 ...
Monday, 14 September 09
CIL MAY REDUCE FLOOR PRICE OF E-AUCTION COAL
After receiving a lukewarm response to the forward e-auction started in two of its subsidiaries, Coal India Limited (CIL) is mulling to reduce the f ...
Monday, 14 September 09
INDONESIAN GOVT UPBEAT ABOUT $1.5B, 185-KM COAL RAILWAY PROJECT
In addition to a 30-year concession right, the government will also award a competitive pricing scheme as an incentive to lure investors in a US$1.5 ...
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- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Manunggal Multi Energi - Indonesia
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- The University of Queensland
- Eastern Coal Council - USA
- White Energy Company Limited
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- Goldman Sachs - Singapore
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Globalindo Alam Lestari - Indonesia
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IEA Clean Coal Centre - UK
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Riau Bara Harum - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Australian Coal Association
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- Anglo American - United Kingdom
- VISA Power Limited - India
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- South Luzon Thermal Energy Corporation
- Singapore Mercantile Exchange
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
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