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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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Tuesday, 12 May 09
BANPU'S PROFIT DOUBLES TO RECORD AFTER SALES JUMP - BLOOMBERG
BANPU Pcl, Thailand’s biggest coal producer, reported first-quarter profit more than doubled to a record after higher prices for the fuel boos ...
Tuesday, 12 May 09
COAL IN PLACE, GMR PLANS 2,000-MW THERMAL PLANT - BUSINESS-STANDARD
GMR ENERGY, a subsidiary of Bangalore-based infrastructure company GMR Infrastructure Ltd, is planning to set up a 2,000-Mw thermal power plant near ...
Monday, 11 May 09
SOUTH AFRICA PROBLEMS SLOW INDIA COAL BUYING - MINE WEB
Indian imports of South African coal are likely to be close to 12 million tonnes in 2009, up from 10 million last year.
Indian coal buyers were a ...
Saturday, 09 May 09
THE WEEK SAW BIT OF HECTIC ACTIVITY IN THE FREIGHT MARKET - VISTAAR SHIPPING
COALspot.com (Singapore) : VISTAAR Shipping Pte Limited, one of the experienced ship operator in Singapore, said, the week saw bit of hectic ac ...
Saturday, 09 May 09
CHINA PLANS TO BUILD COAL STOCKPILE BASES IN SHANDONG - BLOOMBERG
China, the world’s largest coal producer and consumer, plans to build stockpiles of the fuel in the eastern province of Shandong to ensure sup ...
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- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- The University of Queensland
- Electricity Authority, New Zealand
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- Central Electricity Authority - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Petron Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- Parry Sugars Refinery, India
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Therma Luzon, Inc, Philippines
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
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