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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, 14 November 16
KOMIPO'S SEOCHEON POWER PLANT TO IMPORT 240,000 MT OF SEMI / ANTHRACITE COAL FOR Q1'17
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 240K mt of Semi-Anthracite and Anthracite Coal f ...
Monday, 14 November 16
DUNIA MAKMUR SUBSIDIARY BAGS MINING SERVICE CONTRACT WORTH $ 282.63 MILLION
PT Bukit Makmur Mandiri Utama (BUMA), has signed a life of mine contract with PT Tadjahan Antang Mineral (TAM) with a contract value of approximate ...
Monday, 14 November 16
THE CAPE INDEX ROSE 44.57 PER CENTS TO 2303 POINT WEEK OVER WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose slightly and ending in a positive note this past wee ...
Friday, 11 November 16
INDONESIAN 4200 GAR COAL IS THE MOST ATTRACTIVE COAL IN TODAY'S MARKET - OPINION POLL
“ Which coal type of Indonesian origin do you find the most attractive in today's market?”
The on-line opinion poll conducted ...
Friday, 11 November 16
WEEKLY U.S. COAL OUTPUT FELL SLIGHTLY W/E NOVEMBER 5
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 16.9 million short ton ...
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- Gujarat Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- ICICI Bank Limited - India
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- McConnell Dowell - Australia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- Marubeni Corporation - India
- Mjunction Services Limited - India
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- CNBM International Corporation - China
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Malabar Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
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