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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, 31 August 09
INDONESIA ADARO'S NET PROFIT SOARS 1,506 PERCENT ON HIGH PRICES
The Jakarta Post reported that, the country's second largest coal producer, PT Adaro Energy said Sunday that its first-half net profit soared 1,506 ...
Sunday, 30 August 09
THE FUTURES FOR THREE YEARS FOR 2010-2012 IS AROUND PANAMAX / US$ 15,500 & SUPRAMAX / US$ 13,500 PER DAY
COALspot.com (Singapore): The dry bulk market continued to be soft this week and the BDI was almost stable and closed at 2,421 points this week.
...
Friday, 28 August 09
INDONESIA SEEKS TO INCREASE COAL PRODUCTION TO BOLSTER REVENUE
The Jakarta Post, the leading english news paper in Indonesia reported that, Indonesia expects to increase coal production by up to 20 million tons ...
Friday, 28 August 09
MERCURIA ENERGY OPENS INDONESIA TRADING OFFICE
COALspot.com ( Indonesia): Mercuria Energy Group has opened a new office in Jakarta, Indonesia, focussed on trading coal.
Jakarta-based Emanuele ...
Friday, 28 August 09
COAL MINE BUYERS DUST OFF THEIR CASH ( ANALYZED BY REUTERS)
* Coal asset buyers give up waiting for bargains
* Mining majors expected to buy not sell
* South Africa a target, Indonesia less so
By Jackie ...
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Thiess Contractors Indonesia
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Oldendorff Carriers - Singapore
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Dalmia Cement Bharat India
- Grasim Industreis Ltd - India
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- Minerals Council of Australia
- Planning Commission, India
- Commonwealth Bank - Australia
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Bayan Resources Tbk. - Indonesia
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Vedanta Resources Plc - India
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Australian Coal Association
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Barasentosa Lestari - Indonesia
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
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