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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, 09 January 10
IMPORTED, LOCAL COAL TO BE MIXED IN POWER DRIVE
The government is likely to create a pool price of coal, wherein imported coal and Indian coal could be mixed, making the imported coal becomes more ...
Friday, 08 January 10
SA COAL PRICES TO SPIKE ON RESUMED INDIA BUYING
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Friday, 08 January 10
COLOMBIAN COAL STARTS TO MOVE TO CHINA - TRADERS
* Producer sells cape cargo Colombian coal to China
* Firm bids in freight market
* More shipments expected
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Thursday, 07 January 10
PT. BUKIT ASAM TO BUILD NEW COAL LOADING TERMINAL AND COAL LOADER
COALspot.com (Indonesia): PT Bukit Asam (Persero) Tbk, Indonesia’s state owned coal mining company, is planning to build an additi ...
Thursday, 07 January 10
RAMKY PLANS COAL MINING IN INDONESIA
Ramky Infrastructure Limited, a Hyderabad-based integrated infrastructure construction and development management company with strategic emphasis on ...
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- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Ind-Barath Power Infra Limited - India
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- Central Java Power - Indonesia
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Uttam Galva Steels Limited - India
- Tata Chemicals Ltd - India
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- Aditya Birla Group - India
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- Indika Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Indonesian Coal Mining Association
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Videocon Industries ltd - India
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