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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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Monday, 20 July 09
INDONESIA PRODUCES 72 MILLION MT IN FIRST HALF OF YEAR: OFFICIAL
Indonesia produced 72 million mt of coal in the first half of 2009, or 31.3% of the government’s target this year, a senior government officia ...
Sunday, 19 July 09
JINDAL S&P IN TALKS TO BUY SA COAL MINE FOR RS 350-400 CR (US$ 80 - 90 MILLION)
Economic Times reported that, Naveen Jindal-led Jindal Steel & Power (JSPL) is acquiring a thermal coal mine in South Africa, a top company exec ...
Saturday, 18 July 09
REN POWER CZ COMMISSIONS ANOTHER PHOTOVOLTAIC POWER STATION
COALspot.com (Press Release): REN Power CZ, a company in the Czech Coal Group, has put into operation another photovoltaic power station. The plant ...
Saturday, 18 July 09
THE FUTURE FOR SUPRAMAX FOR NEXT 3 YEARS TILL 2012 WOULD BE AROUND US$ 13,500 PER DAY - CAPT. REDDY
COALspot.com ( Singapore): The market moved up sharply this week , which was quite unexpected.
The BDI was up by 557 which is an increase of 18 ...
Friday, 17 July 09
CHINA COAL-SPOT PRICES EDGE LOWER, SUPPLY APLENTY
China Mining reported that, spot prices in China's top coal shipping port Qinhuangdao edged lower from a week earlier, as supply grew, offsetting t ...
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- Parliament of New Zealand
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- The University of Queensland
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Rashtriya Ispat Nigam Limited - India
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- Planning Commission, India
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Bharathi Cement Corporation - India
- White Energy Company Limited
- Siam City Cement PLC, Thailand
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
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