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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, 15 January 11
MAKE SACRIFICES TO SAVE PLN, INDONESIA GOVT BEGS MINERS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Darwin Zahedi Saleh, Indonesia's minister of energy and mineral resources, on Friday appealed to local coal compan ...
Saturday, 15 January 11
RISING PRICES, GOVERNMENT DECREE LEAVE PLN AT LOGGERHEADS WITH COAL FIRMS - THE JAKARTA GLOBE
The Jakarta Globe reported that, As coal prices continue to increase, state utility Perusahaan Listrik Negara faces problems in securing enough coal ...
Thursday, 13 January 11
SURGING COAL PRICES UNDERMINE PLN'S EFFICIENCY PROGRAM - THE JAKARTA POST
The Jakarta Post reported that, The soaring global coal prices are undermining state electricity company PT PLN's pledge to improve its operational ...
Thursday, 13 January 11
SPML INFRA TO DOUBLE INDONESIA COAL MINE OUTPUT IN TWO YEARS - DNA INDIA
DNA India reported that, Kolkata-based infrastructure company SPML Infra, formerly Subhash Projects & Marketing Ltd, will in two years nearly do ...
Thursday, 13 January 11
DRY BULK RATES HIT NEW MULTI-MONTH LOWS ON AUSTRALIAS FLOODS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Floods in Australia’s Queensland has seriously disrupted coal shipments and together with a flood of vessels has pushed freight rates for dry ...
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Showing 5426 to 5430 news of total 6871 |
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- Chamber of Mines of South Africa
- Parry Sugars Refinery, India
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Economic Council, Georgia
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Georgia Ports Authority, United States
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Cement Manufacturers Association - India
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- CNBM International Corporation - China
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- Australian Coal Association
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Videocon Industries ltd - India
- The University of Queensland
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Thai Mozambique Logistica
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Minerals Council of Australia
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
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