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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, 01 September 09
GLOBAL COAL PRICES UNDER PRESSURE AS CHINESE PROVINCE RETURNS TO THE PRODUCTION FRAY - REUTERS
China is set to return to role of coal exporter as the deadline for thousands of small coal mines in its Shanxi province to reopen after being shut ...
Tuesday, 01 September 09
INDONESIA PLN SECURES 1.9 MILLION TONNES COAL FOR NEW POWER PLANT
Reuters reported that Indonesia's state electricity firm PT Perusahaan Listrik Negara has secured 1.9 million tonnes of sub bituminous coal per yea ...
Tuesday, 01 September 09
EXPORT OF COAL RAW MATERIAL SHOULD BE REDUCED - INDONESIAN OFFICIAL
Antara reported that, Coal producing companies should reduce the volume of their export of coal raw material and increase the volume of their finish ...
Tuesday, 01 September 09
NEWCASTLE WEEKLY COAL EXPORTS RISE 23%, SHIP QUEUE DECREASES
Bloomberg reported that, Coal shipments from Australia’s Newcastle port, the world’s biggest export harbor for the fuel, rose 23 percent ...
Monday, 31 August 09
INDIA MMTC ISSUE TENDER TO IMPORT 12.5 MMT COAL TO BE SUPPLIED OVER A PERIOD OF 12 MONTHS
COALspot.com (India): MMTC has re-issued a tender to import 12.50 Million Metric Tonnes (12.50 MMT) (+/- 2%) of thermal coal to be supplied over a p ...
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- OPG Power Generation Pvt Ltd - India
- ICICI Bank Limited - India
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Larsen & Toubro Limited - India
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Marubeni Corporation - India
- SMC Global Power, Philippines
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Parliament of New Zealand
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Interocean Group of Companies - India
- Planning Commission, India
- Central Electricity Authority - India
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement - Thailand
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Romanian Commodities Exchange
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- Dalmia Cement Bharat India
- Miang Besar Coal Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
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