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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, 24 December 09
EUROSEAS LTD. ANNOUNCES TWO-YEAR TIME CHARTER AGREEMENT FOR PANAMAX BULK CARRIER
Euroseas Ltd., an owner and operator of drybulk carriers and container vessels and provider of seaborne transportation for dry bulk and containerize ...
Wednesday, 23 December 09
INDONESIA POWER CHIEF TO BUILD PLANTS OUTSIDE JAVA
Indonesia's state electricity firm plans to build new power plants outside Java island with a combined capacity of around 2,000 megawatts to resolv ...
Wednesday, 23 December 09
BUKIT ASAM SEES CHINA COAL DEMAND BOOST
* Rebound in prices to have pushed up 2009 revs
* To more than double Tarahan port capacity
Reuters reported that, Indonesian state-owned coal m ...
Wednesday, 23 December 09
MACARTHUR COAL OFFERS TO BUY RIVAL GLOUCESTER
Queensland-based Macarthur Coal will offer to buy fellow Australian Gloucester Coal, in a move to add two new mines and increase coal resources.
...
Tuesday, 22 December 09
CHINA CONTRACTED COAL PRICE FOR 2010 SEES SLIGHT INCREASE
A number of coal and power enterprises have concluded their annual power-coal supply contracts for 2010, and the contracted coal price saw slight in ...
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- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Karaikal Port Pvt Ltd - India
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Malabar Cements Ltd - India
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- PTC India Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Sindya Power Generating Company Private Ltd
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Chamber of Mines of South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Formosa Plastics Group - Taiwan
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- CIMB Investment Bank - Malaysia
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
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