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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, 19 October 11
ADARO ACQUIRES BUKIT ENIM ENERGI - INSIDER STORIES
Insider Stories reported that, Coal miner PT Adaro Energy Tbk, via its subsidiary dubbed PT Alam Tri Abadi, today revealed a 46% stake takeover of a ...
Tuesday, 18 October 11
INDONESIAN PRESIDENT APPOINTS JERO WACIK AS NEW MINISTER OF ENERGY & MINERAL RESOURCES
COALspot.com - Jero Wacik has been appointed as minister of energy and mineral resources of Indonesia replacing Darwin Saleh and Prof. Widjajono Par ...
Tuesday, 18 October 11
DELTA DUNIA MAKMUR HAS PRODUCED 3.0 MILLION TONS OF COAL LAST MONTH
COALspot.com - PT. Delta Dunia Makmur, wholly owned subsidiary, PT Bukit Makmur Mandiri Utama (BUMA), Delta Dunia Makmur has removed 1.4 million bcm ...
Monday, 17 October 11
KOWEPO TO BUY 260,000 MT BITUMINOUS COAL
COALspot.com - KOWEPO has issued a spot tender for 260,000MT of minimum 5,600kcal/kg NAR Bituminous Coal.
The tender document also mentioned tha ...
Monday, 17 October 11
CAPESIZE SHIPPING COSTS CLIMB TO 10-MONTH HIGH ON ORE IMPORTS
The cost to hire capesize vessels climbed to a 10-month high as rising imports of iron ore to China boosted demand for the ships.Monthly iron-ore sh ...
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- Cement Manufacturers Association - India
- MS Steel International - UAE
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- CNBM International Corporation - China
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- White Energy Company Limited
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- GAC Shipping (India) Pvt Ltd
- Metalloyd Limited - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- The University of Queensland
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- London Commodity Brokers - England
- Posco Energy - South Korea
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Independent Power Producers Association of India
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- PTC India Limited - India
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
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