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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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Tuesday, 22 December 09
NEWCASTLE COAL SHIP QUEUE LONGEST IN TWO YEARS AS EXPORTS SLOW
Bloomberg reported that, the queue of coal ships waiting at Australia’s Newcastle port, the world’s biggest export harbor for the fuel, ...
Monday, 21 December 09
INDONESIA HAS EXPORTED AROUND 195.303 MILLION TONS OF COAL TILL END OF NOVEMBER 2009
COALspot.com (Indonesia): China has been the largest single buyer of Indonesian coal in November 2009, by taking 28.69% of total exported quan ...
Monday, 21 December 09
RUSSIAN COAL MINER SUEK EYES '10 LONDON IPO
* Company valued at around $8-$9 bln - banking source
* IPO could take place in H1 - source
* May list 25 pct of share capital - report
Reuters ...
Monday, 21 December 09
IGCC OUTLOOK CHINA 2010 TO BE HELD IN APRIL 2010 IN SHANGHAI
COALspot.com (China): Press Release - Aiming at unveiling the growth area of IGCC polygeneration, IGCC Outlook China 2010 is planned to be hel ...
Sunday, 20 December 09
GLOBAL COAL MAJORS MAKE THEIR PRESENTATIONS
Major energy companies from four countries, including the U.S., Indonesia and South Africa, have completed detailed presentations before a committee ...
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- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Orica Mining Services - Indonesia
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- The University of Queensland
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- The Treasury - Australian Government
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- Global Business Power Corporation, Philippines
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Singapore Mercantile Exchange
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