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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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Wednesday, 18 March 09
MANILA'S NAPOCOR SAYS BIDDING FOR 100,000T COAL FAILS - REUTERS
Top Philippine electricityproducer National Power Corp (Napocor) was unable to secure 100,000 tonnes of local coal for one of its power plantsfollow ...
Wednesday, 18 March 09
INDONESIA'S PLN APPOINTS KPC TO SUPPLY COAL - REUTERS
State electricity firm Perusahaan Listrik Negara (PLN) appointed PT Kaltim Prima Coal to supply 1 million tonnes of coal per annum to Tanjung Jati B ...
Monday, 16 March 09
TATA POWER HAS NO PLAN TO SELL STAKE IN INDONESIA BUMI MINES - BLOOMBERG
Tata Power Co., India’s biggest electricity generator outside state control, said it has “no intention” to sell its stake in two I ...
Monday, 16 March 09
ANTAM SELECTS PARTNERS FOR POMALAA POWER PLANT - THE JAKARTA POST
PT Aneka Tambang Tbk, Indonesia’s second-largest nickel producer, said it intended to develop a $300 million coal-fired plant in Pomalaa, Sout ...
Monday, 16 March 09
ADARO TO BOLSTER SUPPLY CHAIN THROUGH ACQUISITIONS - THE JAKARTA POST
PT Adaro Energy Tbk, Indonesia's second-largest coal producer, plans to acquire a coal barging and transshipment company to improve its supply chai ...
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- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- VISA Power Limited - India
- London Commodity Brokers - England
- Minerals Council of Australia
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Samtan Co., Ltd - South Korea
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Oldendorff Carriers - Singapore
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Merrill Lynch Commodities Europe
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- PowerSource Philippines DevCo
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Indogreen Group - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
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