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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, 10 October 11
MOZAMBIQUE CHANNEL TO BE THE NEW PIRACY HOTSPOT FOR THIS YEAR SAYS MARITIME SECURITY EXPERT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The Mozambique Channel, as well as the entrance to the Persian Gulf, are expected to become some of the new pirate hotspots for piracy, says Richard ...
Sunday, 09 October 11
FREIGHT MARKET ENDED WITH A POSITIVE DIRECTION - VISTAAR
COALspot.com - The market ended with a positive note with all the segments up except for handy size. The biggest gainer was Panamax index up by 11 p ...
Saturday, 08 October 11
INDONESIAN MINER PLANS $167M IPO TO FUEL SUMATRA COAL BOOM - JG
The Jakarta Globe reported that, coal miner Atlas Resources aims to raise as much as Rp 1.5 trillion ($167 million) in an initial public offering to ...
Friday, 07 October 11
MINING REGULATIONS , OBSTACLES AND GROWTH : INDIA VS INDONESIA - SUNIL K KUMBHAT
COALspot.com - The Govt of India has passed long pending Mines & Minerals (Regulation and Development) Bill, 2011, which seeks to replace ...
Friday, 07 October 11
$100M FOR EXPANSION INTO KALIMANTAN MINING: AKR
The Jakarta Globe, one of the leading English news paper in Indonesia reported that, AKR Corporindo, a fuel and chemical distributor, has set aside ...
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- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- CIMB Investment Bank - Malaysia
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- The University of Queensland
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- Parliament of New Zealand
- Bayan Resources Tbk. - Indonesia
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- ICICI Bank Limited - India
- Antam Resourcindo - Indonesia
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- SMG Consultants - Indonesia
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Planning Commission, India
- Bhushan Steel Limited - India
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Sindya Power Generating Company Private Ltd
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
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