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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, 26 August 09
COAL INDIA MAY HIKE COAL PRICES BY UP TO RS 175 (ABOUT US$ 3.60) A TONNE
The Economic Times reported that, state-owned Coal India may hike coal prices by up to Rs 175 (~ US$ 3.60) a tonne to close the gap between domestic ...
Tuesday, 25 August 09
KOREA TO INTRODUCE COAL-MINING ROBOTS TO REDUCE THE RISK OF HUMAN LOSSES FROM CONVENTIONAL MINING
Far East Gizmos reported that, The state-run Korea Coal Corp. (KOCOAL) signed a memorandum of understanding (MOU) on Monday with three Korean engine ...
Tuesday, 25 August 09
INDIA'S GNFC EXTENDED ONLINE BIDDING FOR PURCHASE OF 260,000 T COAL TO 23RD SEPTEMBER 2009
COALspot.com (India): Gujarat Narmada Valley Fertilizers Co. Ltd. (GNFC) invites offers (e-Tender) for supply of 130,000 MT +/- 5% on firm basis and ...
Tuesday, 25 August 09
ANTAM CONSIDERS ACQUIRING BHP
The Jakarta Post reported that, State mining company PT Aneka Tambang (Antam) is contemplating acquiring BHP Billiton's coal concessions in Central ...
Tuesday, 25 August 09
COAL OUTPUT TO RISE IN H2 BUT EXPORTS TO GO FLAT
The leading english news paper in Indonesia reported that, It is estimated coal production will rise by 5.7 percent in the second semester from a ye ...
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- Planning Commission, India
- SN Aboitiz Power Inc, Philippines
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Heidelberg Cement - Germany
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Wilmar Investment Holdings
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Ambuja Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Thiess Contractors Indonesia
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Star Paper Mills Limited - India
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Finance - Indonesia
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- White Energy Company Limited
- Coal and Oil Company - UAE
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Merrill Lynch Commodities Europe
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
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