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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, 05 May 09
INDONESIA'S ADARO PAYS $78.6 MLN FOR COAL-BARGING FIRM - REUTERS
INDONESIA's largest coal producer by market value, PT Adaro Energy Tbk, said late on Monday it paid $78.6 million for a 74 percent stake in Orchard ...
Tuesday, 05 May 09
PHILIPPINES SEMIRARA STILL EXPECTS HIKE IN COAL SALES - BUSINESS MIRROR
DESPITE the anticipated soft demand resulting from the prevailing global financial crisis, the country’s largest coal producer Semirara Mining ...
Monday, 04 May 09
VISTAAR SINGAPORE SAYS, THIS MONTH DRY BULK FREIGHT LIKELY TO COME DOWN
COALspot.com (Singapore) - VISTAAR shipping Services Pte Limited of Singapore, said, the beginning of last week started with bit of weakness an ...
Monday, 04 May 09
PNOC-EC TO GROW COAL OPERATIONS - PHILIPPINE DAILY INQUIRER
LISTED firm Philippine National Oil Co.-Exploration Corp. plans to expand its operations this year to ensure the steady supply of coal and fur ...
Saturday, 02 May 09
BUMI'S FIRST-QUARTER PROFIT RISES 21% ON COAL PRICE - BLOOMBERG
PT BUMI RESOURCES, Asia’s biggest exporter of power-station coal, said first-quarter profit rose 21 percent after it earned higher prices for ...
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- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Mercator Lines Limited - India
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Interocean Group of Companies - India
- PTC India Limited - India
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- IEA Clean Coal Centre - UK
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Vedanta Resources Plc - India
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Indian Energy Exchange, India
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- Aditya Birla Group - India
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- The Treasury - Australian Government
- Australian Coal Association
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- Parliament of New Zealand
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- Indogreen Group - Indonesia
- Georgia Ports Authority, United States
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Economic Council, Georgia
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
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