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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, 11 December 13
THE INDONESIAN GOVERNMENT IS CONSIDERING SETTING A REGULATION ON THE MINIMUM PURITY TO REGULATE UNPROCESSED ORE BAN
COALspot.com: Energy and Mineral Resources Minister Jero Wacik recently proposed to house those mining (mineral) companies that had shown a commitme ...
Wednesday, 11 December 13
BDI REACHED A PEAK OF YEAR RECORD OF 2,237 POINTS WHICH IS A SIGNIFICANT CHANGE IN MARKET CONDITIONS
Getting closer to the end of 2013, it is important that we have a review of the course the market has taken these past 12 months by looking at the B ...
Tuesday, 10 December 13
HNL, AN INDIAN STATE-OWNED NEWSPRINT PAPER MAKER SEEKS 50K TONS OF INDONESIAN 5600 COAL
COALspot.com: Hindustan Newsprint limited (HNL), an Indian state owned news print paper producer invited bids to supply 50,000MT of min 5,200kcal/kg ...
Tuesday, 10 December 13
COLOMBIAN THERMAL COAL EXPORTS SLIPPED 25.54% M-M IN OCTOBER'13
COALspot.com: Colombia's Thermal coal exports in October dropped 25.54% month on month to 5,990,815.13 million mt, according to data from mining de ...
Tuesday, 10 December 13
NEWCASTLE COAL EXPORTS PLUNGE W-O-W
COALspot.com: In the week ended December 9, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 2.50 ...
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- Coal and Oil Company - UAE
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Posco Energy - South Korea
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- Sarangani Energy Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Kaltim Prima Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Samtan Co., Ltd - South Korea
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Anglo American - United Kingdom
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- Minerals Council of Australia
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Indian Oil Corporation Limited
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