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