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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, 29 May 09
INDONESIA PLANS "CLEARING HOUSE" FOR COAL - ALIBABA
Alibaba reported that, Indonesia, the world's biggest thermal coal exporter, plans to set up an agency similar to a clearing house to trade stocks ...
Friday, 29 May 09
INDIKA EYES MORE ACQUISITIONS - THE JAKARTA POST
Having nearly completed the acquisition of engineering and mining company PT Petrosea, energy company PT Indika Energy is preparing for more acquisi ...
Friday, 29 May 09
PTBA PAYS DIVIDENDS OF RP 371.5 A SHARE - THE JAKARTA POST
The annual shareholders' meeting of state-controlled coal producer PT Tambang Batubara Bukit Asam (PTBA) approved on Thursday the allocation of 50 ...
Thursday, 28 May 09
INDIANS CHOOSE SOUTH AFRICA COAL OVER INDONESIAN - MINEWEB (REUTERS)
South African cargoes are about $4 a tonne cheaper than Indonesian coal, as a result India now prefers South Africa .
Indian imports of South Afr ...
Wednesday, 27 May 09
NEWCASTLE PORT'S WEEKLY COAL EXPORTS INCREASE 3.6% - BLOOMBERG
Coal shipments from Australia’s Newcastle port, the world’s biggest export harbor for the fuel, rose 3.6 percent last week while the num ...
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- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Agrawal Coal Company - India
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Iligan Light & Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Bhushan Steel Limited - India
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Goldman Sachs - Singapore
- Central Electricity Authority - India
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- Coalindo Energy - Indonesia
- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Jaiprakash Power Ventures ltd
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- McConnell Dowell - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- The University of Queensland
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Planning Commission, India
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
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