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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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Friday, 26 June 09
BAYAN TARGETS GROSS PROFIT TO RISE BY 86.2 PERCENT
Local coal producer publicly listed PT Bayan Resources is targeting this year's gross profit to rise by 86.2 percent on the back of higher sales vo ...
Thursday, 25 June 09
INDIA'S ULTRATECH BUYS 500,000T S.AFRICA COAL
Indian cement maker Ultratech has bought 10 handymax cargoes of South African coal at $73.00-$74.00 a tonne CIF for July-September delivery, Indian ...
Wednesday, 24 June 09
NTPC BURNS MORE COAL TO PRODUCE ELECTRICITY
A tonne of coal is the same as another tonne of coal, you might think.
But power major NTPC Ltd is finding that this year’s coal is not yie ...
Wednesday, 24 June 09
NTPC, COAL INDIA TO BUY MINING ASSETS OVERSEAS
State-owned utility National Thermal Power Corporation (NTPC) and the largest coal producer Coal India are in advanced stages of acquiring mining as ...
Tuesday, 23 June 09
NEWCASTLE WEEKLY COAL EXPORTS DECREASE 15%; SHIP QUEUE RISES
Coal shipments from Australia’s Newcastle port, the world’s biggest export harbor for the fuel, fell 15 percent last week while the numb ...
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- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Planning Commission, India
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Makarim & Taira - Indonesia
- Barasentosa Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- Straits Asia Resources Limited - Singapore
- Tata Chemicals Ltd - India
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Simpson Spence & Young - Indonesia
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Marubeni Corporation - India
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- The University of Queensland
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Coalindo Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Eastern Coal Council - USA
- Mercuria Energy - Indonesia
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