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