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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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Wednesday, 03 February 10
RECOVERY IN INDONESIAN MINING SECTOR EXPECTED TO BOOST SALES, UNITED TRACTORS SAYS
PT United Tractors, the country’s biggest supplier of heavy equipment, said on Tuesday that it expected sales to increase 15 percent this year ...
Tuesday, 02 February 10
THAI BANPU SAYS HIGHER COSTS TO HIT COAL PROFITS
Thailand's top coal miner, expects profits from its coal business in 2010 to be lower than last year due to higher costs, but its chief executive i ...
Monday, 01 February 10
CIL PLANS TO INVEST IN OVERSEAS COAL MINES
Over the next 10 years, CIL expects to import from these mines at least 500 million tonnes of thermal coal, a variety used by power plants
The bo ...
Sunday, 31 January 10
AUSTRALIA NEWCASTLE THERMAL COAL FALLS 0.7 PERCENT TO $ 98.53
Power-station coal prices at Australia’s Newcastle port, a benchmark for Asia, declined 0.7 percent, falling for the first time in four weeks. ...
Sunday, 31 January 10
NTPC TO IMPORT COAL
NTPC Ltd plans to import coal directly, starting next fiscal.
“We plan to import 15-16 million tonnes of coal directly from next year,&rdqu ...
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- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Neyveli Lignite Corporation Ltd, - India
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- ICICI Bank Limited - India
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Planning Commission, India
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- VISA Power Limited - India
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Jaiprakash Power Ventures ltd
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Coalindo Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Holcim Trading Pte Ltd - Singapore
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- CNBM International Corporation - China
- Economic Council, Georgia
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
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