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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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Thursday, 23 July 09
COAL IMPORTS SURGE; EXPORTS DOWN IN H1
China Trade Information reported that, China’s coal imports surged by 126.3 percent year-on-year in the first half of 2009, reaching 48.3 mill ...
Thursday, 23 July 09
SRI LANKA CALLS FOR COAL SUPPLY BIDS
Daily Mirro reported that, In a move to install the country’s first coal power plant, Sri Lanka has invited bids to supply 2.4 million metric ...
Thursday, 23 July 09
POWER INVESTORS TURN BACKS ON VIETNAMESE COAL IMPORTERS
VietNamNet Bridge reported that, Investors of power plants always seek foreign coal sources to import themselves, believing they can come by it chea ...
Wednesday, 22 July 09
BERAU COAL DRAWS LOCAL, CHINESE BIDS - SOURCES
* Indonesian coal firm draws local, Chinese bids-sources
* Deal could value Berau at more than $1 billion-sources
Reuters reported that, China' ...
Wednesday, 22 July 09
ONE TENDERS FOR 114,000 MT FOR NOV-JAN
Moroccan state-owned power utility Office National de l’Electricité (ONE) has launched a tender for three handymax shipments of coal fo ...
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- SMC Global Power, Philippines
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- Posco Energy - South Korea
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- CNBM International Corporation - China
- London Commodity Brokers - England
- Electricity Authority, New Zealand
- VISA Power Limited - India
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- Indian Oil Corporation Limited
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- Medco Energi Mining Internasional
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- Aditya Birla Group - India
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Gujarat Sidhee Cement - India
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- The University of Queensland
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Agrawal Coal Company - India
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
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