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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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- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Planning Commission, India
- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Bhushan Steel Limited - India
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Bhoruka Overseas - Indonesia
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- Directorate Of Revenue Intelligence - India
- PowerSource Philippines DevCo
- Central Electricity Authority - India
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Riau Bara Harum - Indonesia
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Carbofer General Trading SA - India
- The University of Queensland
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
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