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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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Monday, 01 June 09
LAHAT RELIES ON COAL FOR GROWTH
Lahat regency in South Sumatra spans 6,618.27 square kilometers, encompasses 19 districts and covers 528 subdistricts and villages. It is inhabited ...
Monday, 01 June 09
LANDED COST OF IMPORTED COAL HAS INCREASED BY 10 - 15% COMPARE TO EARLY THIS YEAR - PAKISTAN TRADERS
COALspot.com (Pakistan): Due to visiting non commercial vessels occupied commercial berths in Karachi port, coal carrying vessels were sufferi ...
Monday, 01 June 09
LAHAT RELIES ON COAL FOR GROWTH - THE JAKARTA POST
Lahat regency in South Sumatra spans 6,618.27 square kilometers, encompasses 19 districts and covers 528 subdistricts and villages. It is inhabited ...
Saturday, 30 May 09
THE CHINESE IMPORTS OF IRON ORE,COAL AND NICKEL ORE SEEMED TO BE STEADY - VISTAAR SINGAPORE
COALspot.com (Singapore): VISTAAR Shipping Pte Limited, an experienced ship operator from Singapore,said, the Baltic index rally continued this week ...
Saturday, 30 May 09
COAL INDIA SIGNS FUEL SUPPLY AGREEMENT WITH NTPC - SINDHTODAY
India’s largest coal miner Coal India Friday inked a much-awaited fuel supply agreement (FSA) with power generation major NTPC Ltd.
In the ...
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- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Chamber of Mines of South Africa
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
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- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
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- Metalloyd Limited - United Kingdom
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- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Savvy Resources Ltd - HongKong
- Pendopo Energi Batubara - Indonesia
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- South Luzon Thermal Energy Corporation
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- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
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- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- Parliament of New Zealand
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- ASAPP Information Group - India
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Central Electricity Authority - India
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- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Indika Energy - Indonesia
- Bhatia International Limited - India
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
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