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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 September 09
AUSTRALIA SEES HIGHER ASIAN THERMAL COAL IMPORTS
* Asia '09 imports to rise 3.5%, vs pvs f'cast of 3.3% fall
* Asia 2010 thermal coal imports expected to rise 6.3 pct
* China to become net im ...
Tuesday, 22 September 09
PANAMA CANAL EXPANSION MAY AID COLOMBIA COAL TO ASIA
* Colombia producers hope for growth in Asia shipments
* Panama Canal will allow smaller coal Capesize vessels
* Australia, Indonesia to remain bi ...
Monday, 21 September 09
ACCC SET TO APPROVE NEWCASTLE COAL SHIPPING AGREEMENT
ABC reported that, The competition regulator says it is likely to approve a new agreement over coal loading arrangements at Newcastle.
Australian ...
Friday, 18 September 09
PEABODY ENERGY ESTABLISHES ASIAN COAL TRADING HUB IN SINGAPORE
Peabody Energy announced it has opened an office in Singapore that will serve as the new hub for Peabody COALTRADE International activities in South ...
Friday, 18 September 09
AUSTRALIA NEWCASTLE COAL PORT: SEEKS INTERIM QUOTA SYSTEM
Reuters reported that, Australia's Newcastle coal terminal wants to re-introduce an interim export quota system after a group of miners led by BHP ...
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- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Intertek Mineral Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Oldendorff Carriers - Singapore
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Orica Mining Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- Ministry of Transport, Egypt
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Borneo Indobara - Indonesia
- The University of Queensland
- PowerSource Philippines DevCo
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Australian Coal Association
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- GMR Energy Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- Sical Logistics Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- Parliament of New Zealand
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Commonwealth Bank - Australia
- Eastern Coal Council - USA
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
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