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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, 19 August 09
MMTC SCRAPS CONTROVERSIAL COAL TENDER
Most of NTPC’s coal-based projects don’t have sufficient stock of coal
State-owned trading firm MMTC Ltd has scrapped its controversi ...
Wednesday, 19 August 09
THE 3RD ASIA PACIFIC COAL TRADING & INVESTMENT OUTLOOK 2009 WILL BE HELD IN CHINA IN SEPTEMBER 2009
COALspot.com (China): Due to the inversion of domestic and overseas coal price in China, China coal import increased dramatically and continuously. ...
Wednesday, 19 August 09
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Tuesday, 18 August 09
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Tuesday, 18 August 09
BANPU TO FOCUS ON CORE BUSINESS
Banpu, the country's leading energy firm, expects to conclude its four-year strategic plan next month, resulting in a strengthening of its core bus ...
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- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- London Commodity Brokers - England
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
- IEA Clean Coal Centre - UK
- Metalloyd Limited - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Deloitte Consulting - India
- Uttam Galva Steels Limited - India
- Formosa Plastics Group - Taiwan
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Parliament of New Zealand
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- Indian Oil Corporation Limited
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- PTC India Limited - India
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- Bhatia International Limited - India
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- The University of Queensland
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- Planning Commission, India
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Lanco Infratech Ltd - India
- Mintek Dendrill Indonesia
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
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