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