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