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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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Saturday, 03 September 11
TNPL TO BUY 240K MT OF NON-COKING COAL
COALspot.com - Tamil Nadu Newsprint and Papers Limited (TNPL), is seeking to procure 240,000 MT +/- 5 percent of non-coking imported coal with ...
Friday, 02 September 11
CAPESIZE DEMAND LIFTS DRY BULK MARKET ONCE AGAIN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In what proves to be the best week of the year for Capesize owners, strong demand has helped propel the dry bulk market to new highs yesterday. The ...
Thursday, 01 September 11
EWP TO BUY 195KT OF VIETNAM COAL
COALspot.com - Korea Midland Power (KOMIPO) has issued an International open bidding for 490kt of sub bituminous coal, according to a bid invitation ...
Thursday, 01 September 11
DRY BULK MARKET TAKES GREAT LEAP FORWARD - NIKOS ROUSSANOGLOU
In what turned out to be a rather hopeful ending of the month, the last day of August saw the dry bulk market’s benchmark, the BDI (Baltic Dry ...
Tuesday, 30 August 11
FAUJI CEMENT CONSUMED MORE THAN 1 MILLION TONS OF LOCAL COAL
Cooper Minerals Inc.based in Vancouver, BC, Canada, is a junior exploration company engaged in the acquisition, exploration and development of miner ...
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- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Wilmar Investment Holdings
- Thai Mozambique Logistica
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Coalindo Energy - Indonesia
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- Posco Energy - South Korea
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Planning Commission, India
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Vizag Seaport Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- Independent Power Producers Association of India
- Globalindo Alam Lestari - Indonesia
- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- White Energy Company Limited
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Xindia Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Aditya Birla Group - India
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- SMC Global Power, Philippines
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- Africa Commodities Group - South Africa
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Marubeni Corporation - India
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