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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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Sunday, 18 September 11
THE COAL IMPORTS TO INDIA, OUT OF INDONESIA LIKELY TO PICK UP - CAPT. REDDY
COALspot.com - The freight market continued the upward trend until midweek almost touching 2,000 points, however towards second half of the week the ...
Saturday, 17 September 11
GVK ACQUIRES HANCOCK COAL AND INFRASTRUCTURE FOR US$ 1.26 BILLION
COALspot.com - GVK group, India’s leading infrastructure developer,confirmed arrangements for the acquisition of a strategic part of large, hi ...
Saturday, 17 September 11
INDIA'S GVK ACQUIRES HANCOCK COAL AND INFRASTRUCTURE PROJECTS IN AUSTRALIA
COALspot.com - GVK group, India’s leading infrastructure developer, today confirmed arrangements for the acquisition of a strategic part of la ...
Friday, 16 September 11
DELTA DUNIA MAKMUR REMOVED 30.9 MILLION BCM OVERBURDEN IN AUGUST 2011
COALspot.com - PT. Delta Dunia Makmur Tbk has removed 30.9 million bcm (+13.2% YoY) overburden in August 2011 while coal production was at 2.9 ...
Thursday, 15 September 11
RUSSIAN COAL EXPORTS UP 10.9% IN JAN-AUG TO 71.50 MILLION TONS - PORT NEWS / HELLENIC SHIPPING
Port News reported that, Coal exports from Russia in January-August 2011 grew by 10.9% compared with the same period last year, to 71.50 million ton ...
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- The University of Queensland
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- ASAPP Information Group - India
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- Economic Council, Georgia
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
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- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Parliament of New Zealand
- Aditya Birla Group - India
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
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- MS Steel International - UAE
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- Attock Cement Pakistan Limited
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- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Eastern Energy - Thailand
- White Energy Company Limited
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
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- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- SMG Consultants - Indonesia
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- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Altura Mining Limited, Indonesia
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Lanco Infratech Ltd - India
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
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- Bukit Asam (Persero) Tbk - Indonesia
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- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
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- Dalmia Cement Bharat India
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- ICICI Bank Limited - India
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- VISA Power Limited - India
- Siam City Cement - Thailand
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Videocon Industries ltd - India
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