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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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Sunday, 05 April 15
FREIGHT RATES UNDER PRESSURE WEEK OVER WEEK
COALspot.com: The Indices fell on all segments and the market seemed to soften this week.
The BDI was almost lost 1.34% week over week and clo ...
Saturday, 04 April 15
BORYEONG POWER OF KOMIPO TO BUY TOTALED 695K MT OF HIGH AND LCV COAL
COALspot.com - Korea Midland Power Co. Ltd. (KOMIPO) is inviting bids from coal producers, marketing companies, or traders to supply of 500000 Metr ...
Friday, 03 April 15
U.S WEEKLY COAL PRODUCTION STAYS FLAT
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 18.3 million short ...
Friday, 03 April 15
TOBA BARA'S PANDU SJAHRIR ELECTED AS NEW CHAIRMAN OF THE INDONESIAN COAL MINING ASSOCIATION
COALspot.com: Pandu Sjahrir, the Vice President Director & CFO of the Jakarta-listed PT Toba Bara Sejahtra — a subsidiary of PT Toba Seja ...
Thursday, 02 April 15
GOVERNMENT MUST WORK WITH MINING, NOT AGAINST IT - PANDU SJAHRIR
The Coal Face: The coal price has hit its lowest point in recent memory
My father used to say to me that his children are his biggest inv ...
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- Indo Tambangraya Megah - Indonesia
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- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- The University of Queensland
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- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
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- Indika Energy - Indonesia
- Planning Commission, India
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- Power Finance Corporation Ltd., India
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- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- Minerals Council of Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
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- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
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- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- VISA Power Limited - India
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
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- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Lanco Infratech Ltd - India
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- The Treasury - Australian Government
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Parliament of New Zealand
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement - Thailand
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- Commonwealth Bank - Australia
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- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
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