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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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Thursday, 14 January 10
INDIANS RESUME S. AFRICA COAL BUYING AGAINST INDEX - REUTERS
Indian trade buyers have resumed buying of South African prompt coal cargoes after a two-month hiatus but are opting for index-linked pricing, hopin ...
Wednesday, 13 January 10
STEAMING COAL SUPPLY SPOT CONTRACT FOR TAEAN POWER PLANT
COALspot.com (South Korea): Korea Western Power Co., Ltd is looking for total 1.12 million tons of Bituminous Coal for TAEAN Power Plant.
Accord ...
Wednesday, 13 January 10
INDONESIA ISSUES COAL, METAL DECREE
Indonesia has issued a ministerial decree which requires metal and coal miners to set aside a certain amount of their production for domestic needs, ...
Wednesday, 13 January 10
RESTING TIME FOR INDONESIAN COAL LOADING VESSELS
COALspot.com (Indonesia): 11 - 15 vessels are waiting in anchorages of Muara Berau and Tanjung Pemancingan to load total about 700,000 – ...
Wednesday, 13 January 10
SOUTH AFRICA STEAM COAL PRICE FALLS SHARPLY
Reuters reported that South African physical coal prices fell sharply on Tuesday with a March cargo trade at USD 87.5 a tonne FOB Richards Bay and d ...
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- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Uttam Galva Steels Limited - India
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Indian Energy Exchange, India
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Mercator Lines Limited - India
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Thiess Contractors Indonesia
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- New Zealand Coal & Carbon
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- MS Steel International - UAE
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- The University of Queensland
- Aditya Birla Group - India
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Semirara Mining and Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Binh Thuan Hamico - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Planning Commission, India
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Neyveli Lignite Corporation Ltd, - India
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
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