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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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Monday, 16 March 09
COAL MINER BUKIT ASAM RECORDS 135% GAIN IN NET PROFIT FOR 2008 - THE JAKARTA GLOBE
Indonesia's state-owned coal miner PT Tambang Batubara Bukit Asam Tbk said its net profit jumped 135 percent last year, having sold more coal at hi ...
Saturday, 14 March 09
NATIONAL ALUMINIUM TO IMPORT COAL NEXT MONTH TO EASE SHORTAGE - BLOOMBERG
Bloomberg reported that, National Aluminium Co., India’s biggest alumina maker, plans to import as much as 150,000 metric tons of coal next mo ...
Friday, 13 March 09
VIETNAM APPROVES TWO COAL-FIRED POWER PLANTS TO MEET DEMAND -THANHNIENNEWS
Thanhnien News reported that, The government has approved a proposal to build two 2,400-megawatt coal-fired power plants in the provinces of Nam Din ...
Friday, 13 March 09
INDONESIAN STATE-RUN COMPANIES PROFIT MAY FALL 10% THIS YEAR -THANHNIENNEWS
Tanhnien news reported that, Indonesian state-run companies’ profits may fall about 10 percent this year as commodity prices decline, cutting ...
Thursday, 12 March 09
INDONESIA'S CIREBON ELEC IN TALKS ON COAL SUPPLIES - REUTERS
Reuters reported that, Indonesia's PT Cirebon Electric Power, an independent power producer, is in talks with a number of coal suppliers to seek a ...
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- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- White Energy Company Limited
- Planning Commission, India
- Mintek Dendrill Indonesia
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Thai Mozambique Logistica
- Vijayanagar Sugar Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Eastern Coal Council - USA
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- European Bulk Services B.V. - Netherlands
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- The University of Queensland
- The State Trading Corporation of India Ltd
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
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