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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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Tuesday, 26 April 11
NTPC CALLS TENDER FOR 4 MLN TON OF NON-COKING COAL
COALspot.com - NTPC Limited, incorporated in 1975 as a public sector company wholly owned by Government of India, is the largest thermal power gener ...
Monday, 25 April 11
THE FUTURES FOR THREE YEARS WAS AT AROUND PANAMAX/US$ 14,000 PER DAY & SUPRAMAX/US$ 14,000 PER DAY - VISTAAR
COALspot.com - The freight market continued to soften further with all segments down except for the handy size which was marginally up by 10 points. ...
Saturday, 23 April 11
GUPTA COAL TO BAG ONE MILLION TONS OF COAL SUPPLY ORDER FROM KPCL AT AROUND US$ 127.53 PMT
COALspot.com - Karnataka Power Corporation (KPCL), a state utility of Karnataka, India has secured its one million tons of thermal coal with c ...
Saturday, 23 April 11
STRAITS ASIA SETS 11.5 MIO TONS OUTPUT - INSIDER STORIES
Insider Stories reported that, Singapore-listed Straits Asia Resources Limited plans to jack up its coal output target of 8.5% to 11.5 million tons ...
Friday, 22 April 11
DRY BULK MARKET KEEPS FALLING, NOW AT TWO-MONTH LOWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market seems unable at the moment to recover from the weight of newbuilding deliveries, resulting in too many ships competing for fewer ...
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- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- The University of Queensland
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- PNOC Exploration Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Global Coal Blending Company Limited - Australia
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Sical Logistics Limited - India
- Bhatia International Limited - India
- London Commodity Brokers - England
- Petron Corporation, Philippines
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- New Zealand Coal & Carbon
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
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