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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, 08 May 09
INDONESIAN STATE AUDIT BOARD COULD ONLY REACHED A SMALL NUMBER OF KP AND PKP2B - MAJALAHTAMBANG
THE LACK of personnel and the very limited time period have been the reasons why the 2nd semester of the special purpose audit for coal mining ...
Friday, 08 May 09
B.C.'S MINING INDUSTRY HIGH COAL PRICES TO RECORD 2008 PROFITS - PAGUNTAKA
AGGREGATE pre-tax earnings rose to $3.2 billion, the highest amount in the 41-year history of a PricewaterhouseCoppers survey.
B.C.’s minin ...
Thursday, 07 May 09
ASIA COAL-PRICES EASE TO NEAR $63 ON DEMAND CONCERNS - REUTERS
AUSTRALIAN thermal coal prices, a benchmark for Asia, edged lower to around $63 a tonne on concerns over demand, after hitting a two-week high of $6 ...
Thursday, 07 May 09
RICHARDS BAY COAL SHIPMENTS FALL MOST IN 9 MONTHS - BLOOMBERG
RICHARDS BAY Coal Terminal Ltd., Africa’s largest coal-export facility, said shipments fell 24 percent last month, the biggest drop in nine mo ...
Tuesday, 05 May 09
NEWCASTLE PORT'S WEEKLY COAL EXPORTS INCREASE - BLOOMBERG
COAL shipments from Australia’s Newcastle port, the world’s biggest export harbor for the fuel, rose 18 percent last week while the numb ...
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- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Thai Mozambique Logistica
- Economic Council, Georgia
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Kideco Jaya Agung - Indonesia
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Marubeni Corporation - India
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Standard Chartered Bank - UAE
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- PTC India Limited - India
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Sakthi Sugars Limited - India
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Georgia Ports Authority, United States
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- VISA Power Limited - India
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Chamber of Mines of South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- MS Steel International - UAE
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Global Coal Blending Company Limited - Australia
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Altura Mining Limited, Indonesia
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- San Jose City I Power Corp, Philippines
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