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