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