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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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- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- PTC India Limited - India
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Malabar Cements Ltd - India
- Semirara Mining Corp, Philippines
- Agrawal Coal Company - India
- Bhatia International Limited - India
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Mercator Lines Limited - India
- The University of Queensland
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Marubeni Corporation - India
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
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