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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, 01 June 09
LAHAT RELIES ON COAL FOR GROWTH
Lahat regency in South Sumatra spans 6,618.27 square kilometers, encompasses 19 districts and covers 528 subdistricts and villages. It is inhabited ...
Monday, 01 June 09
LANDED COST OF IMPORTED COAL HAS INCREASED BY 10 - 15% COMPARE TO EARLY THIS YEAR - PAKISTAN TRADERS
COALspot.com (Pakistan): Due to visiting non commercial vessels occupied commercial berths in Karachi port, coal carrying vessels were sufferi ...
Monday, 01 June 09
LAHAT RELIES ON COAL FOR GROWTH - THE JAKARTA POST
Lahat regency in South Sumatra spans 6,618.27 square kilometers, encompasses 19 districts and covers 528 subdistricts and villages. It is inhabited ...
Saturday, 30 May 09
THE CHINESE IMPORTS OF IRON ORE,COAL AND NICKEL ORE SEEMED TO BE STEADY - VISTAAR SINGAPORE
COALspot.com (Singapore): VISTAAR Shipping Pte Limited, an experienced ship operator from Singapore,said, the Baltic index rally continued this week ...
Saturday, 30 May 09
COAL INDIA SIGNS FUEL SUPPLY AGREEMENT WITH NTPC - SINDHTODAY
India’s largest coal miner Coal India Friday inked a much-awaited fuel supply agreement (FSA) with power generation major NTPC Ltd.
In the ...
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- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- Planning Commission, India
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- McConnell Dowell - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Merrill Lynch Commodities Europe
- Toyota Tsusho Corporation, Japan
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- The University of Queensland
- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Makarim & Taira - Indonesia
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- Eastern Coal Council - USA
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- Lanco Infratech Ltd - India
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
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