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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, 05 August 09
PEOPLE'S MINING SHOULD BE REGULATED UNDER RPP MINERBA
The Indonesian Institute of Science (LIPI) has called on the government to include a specific provision for people’s mining in the draft govern ...
Tuesday, 04 August 09
SRI LANKA IS LOOKING FOR 650,000 TON OF COAL NEXT YEAR FOR ITS FIRST 900 MW POWER PLANT.
COALspot.com ( Sri Lanka) : Lanka Coal Company Limited was issued a tender on 23 July 2009 to purchase 650,000 +/- 20% MT Bituminous Coal per a ...
Monday, 03 August 09
ONE YEAR CHARTER RATES FOR SUPRAMAX WAS AT AROUND USD 18,500 - VISTAAR SINGAPORE
COALspot.com (Singapore) : The freight market was flat this week with hardly any change in the BDI.The cape was up by about 4 pct and closed at 5,38 ...
Saturday, 01 August 09
APGENCO SAYS BOUGHT 500,000T MALAYSIAN COAL
The Malaysian Insider reported that, Indian state utility Andhra Pradesh Power Generation Corporation Ltd (Apgenco) has bought 500,000 tonnes of Mal ...
Thursday, 30 July 09
KOMIPO OFFERED 3 MILLION MT IN TENDER, TEN TIMES OVERSUBSCRIBED
Korea Midland has received offers for 3 million mt of bituminous steam coal in its latest tender despite the power utility seeking only 300,000 mt, ...
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- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Australian Coal Association
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Indo Tambangraya Megah - Indonesia
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bhatia International Limited - India
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Deloitte Consulting - India
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Maheswari Brothers Coal Limited - India
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- European Bulk Services B.V. - Netherlands
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
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