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