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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, 07 February 11
RBCT SHIPPED 28.67 PERCENT LESS COAL IN JANUARY
COALspot.com - Richards Bay Coal Terminal (RBCT) is the single largest export coal terminal in the world, shipped 4,389,925 MT of coal in January 20 ...
Sunday, 06 February 11
THE PANAMAX & SUPRAMAX FUTURES FOR 2011-2013 WAS AT AROUND US$ 16,500 & US$ 15,000 PER DAY RESPECTIVELY
COALspot.com - With the Chinese new year holidays this week, the market has been fairly quite as expected.
The BDI saw a bigger drop compared to ...
Saturday, 05 February 11
INDONESIAN ENERGY MINISTER HAS SIGNED A DECREE FOR COAL TRANSPORTATION PERMITS ON FRIDAY
COALspot.com - Minister of Energy, Darwin Minister Saleh said, that, he had signed a decree for transportation and sale of coal, which was the ...
Saturday, 05 February 11
ANCHORAGE LOADING POINT MOVED TO MUARA JAWA
COALspot.com - The Ministry of Transportation Republic Indonesia has announced that, the loading point at Muara Berau, East kalimantan h ...
Friday, 04 February 11
PERTAMINA DENIES KAREN AGUSTIAWAN RESIGNS FROM PERTAMINA
COALspot.com - The President Director of PT Pertamina, Karen Agustiawan reportedly will replace Darwin Saleh as Minister of Energy and Mineral Resou ...
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- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- VISA Power Limited - India
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Globalindo Alam Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Pendopo Energi Batubara - Indonesia
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- The State Trading Corporation of India Ltd
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- OPG Power Generation Pvt Ltd - India
- Mercator Lines Limited - India
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
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