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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, 09 December 09
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Coal India Ltd is adopting a conservative approach in pricing despite being allowed to charge import-linked price for the country's minuscule reser ...
Wednesday, 09 December 09
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Tuesday, 08 December 09
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Tuesday, 08 December 09
MEC TO SHIP 2M T INDONESIA COAL TO INDIA IN 2010 - REUTER'S INTERVIEW
The UAE's Middle East Coal plans to start operation of coal mines in Indonesia's East Kalimantan province next year with initial production of 2 m ...
Tuesday, 08 December 09
RICHARDS BAY COAL SHIPMENTS FELL 11% IN NOVEMBER FROM YEAR AGO
Coal exports from South Africa’s Richards Bay, site of the continent’s largest export terminal for the fuel, fell 11 percent in November ...
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- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- MS Steel International - UAE
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- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- Australian Coal Association
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
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- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Independent Power Producers Association of India
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Attock Cement Pakistan Limited
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- ICICI Bank Limited - India
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- Ambuja Cements Ltd - India
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Interocean Group of Companies - India
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
- McConnell Dowell - Australia
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
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