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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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Friday, 19 August 11
INDIA IMPORTS LESS INDONESIAN COAL THAN CHINA IN JULY
COALspot.com - Indonesia shipped 31.30 Million tons of coal in July 2011, up by 10.69 percent compared to June's export of about 28.27 ...
Thursday, 18 August 11
INDONESIAS PROPOSED LOW GRADE COAL EXPORT BAN WILL NOT HAVE A SIGNIFICANT IMPACT ON INDIA - MISWIN MAHESH
COALspot.com - The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by Jan ...
Thursday, 18 August 11
MARUBENI ACQUIRED 42.86% OF YTL JAWA POWER
COALspot.com - Marubeni Corporation (Marubeni) has completed the acquisition of 42.86 percent of the shares of YTL Jawa Power Holdings BV from YTL P ...
Wednesday, 17 August 11
CME LAUNCHES ARGUS COKING COAL SWAP FUTURES
COALspot.com - Argus media reported that, leading exchange CME Group will list an Australian coking coal swap futures contract for trading on the Ny ...
Wednesday, 17 August 11
TAVESCO KILLARA ENERGY TO ACQUIRE COAL CONCESSIONS IN EAST KALIMANTAN
COALspot.com - Killara Resources Limited, an Australian listed company has formed PT Tavesco Killara Energy (TKE), a joint company with PT Tavesco I ...
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- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- VISA Power Limited - India
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Petrochimia International Co. Ltd.- Taiwan
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- OPG Power Generation Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- SMC Global Power, Philippines
- AsiaOL BioFuels Corp., Philippines
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- The University of Queensland
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- Australian Coal Association
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Ministry of Mines - Canada
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