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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, 01 April 11
DRY BULK MARKET WEAKENS ON SLOWER DEMAND, HOPES FOR MID-TERM REBOUND ON JAPANS RECONSTRUCTION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market, as reflected in the Baltic Dry Index (BDI) retreated for a third day yesterday, after staying flat on Monday, to end at 1,530 p ...
Wednesday, 30 March 11
CHALLENGER SIGNS OPTION AGREEMENTS TO PURCHASE FOUR COAL PROJECTS IN INDONESIA
Challenger Signs Three Exclusive Option Agreements to Purchase Four Coal Projects in East Kalimantan, Indonesia
Challenger Deep Resources Corp.ha ...
Wednesday, 30 March 11
KPCL TO IMPORT ONE MILLION TONS OF 6300 GAD COAL
COALspot.com - Karnataka Power Corporation a state utility of Karnataka, India called for open tender for supply of one million tons of 6300 Kcal/kg ...
Wednesday, 30 March 11
WIKA GRABS PROJECT FROM ADARO INDONESIA - INSIDER STORIES
One of Indonesia's largest thermal coal PT Adaro Indonesia has finally mandated PT Wijaya Karya Tbk (WIKA) as a contractor to install and manage ov ...
Tuesday, 29 March 11
JAPAN FACTOR RIPPLING THROUGH THE SHIPPING MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the world watching the latest developments regarding the nuclear crisis in Japan and the devastating effects of the recent tragedy that struck ...
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- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Minerals Council of Australia
- Georgia Ports Authority, United States
- Ind-Barath Power Infra Limited - India
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Mercuria Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Heidelberg Cement - Germany
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- PTC India Limited - India
- India Bulls Power Limited - India
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Antam Resourcindo - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- MS Steel International - UAE
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
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