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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, 23 July 12
NTPC INVITES BIDS FOR 2.6 MILLION TONS OF LOW MOISTURE IMPORTED COAL
COALspot.com - India’s largest electricity generator, NTPC Limited, incorporated in 1975 as a public sector company wholly owned by Government ...
Sunday, 22 July 12
NEW CHAIRMAN FOR AUSTRALIAN COAL ASSOCIATION
The Australian Coal Association (ACA) announced that Mr Ross Willims has been appointed as its new independent Chairman effective November 5 2012. M ...
Sunday, 22 July 12
CENTRAL KALIMANTAN COAL RAILWAY NETWORK WILL BE BUILT BY 2015 - THE BORNEO POST
The borneo post reported that, a declaration to build a coal railway network is signed today (12/07/2012) in front of the Indonesian Vice President ...
Sunday, 22 July 12
COAL PRICES IN MIXED TRENDS; STOCKS REMAIN HIGH AT BOTH ENDS
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for September 2012 delivery fell 0.99 percent on last Friday closing (d-o-d) and 1.19 percent com ...
Sunday, 22 July 12
TATA POWER SIGNS A LONG TERM COAL SUPPLY AGREEMENT WITH PT ANTANG GUNUNG MERATUS, INDONESIA
COALspot.com - Tata Power, India’s largest integrated power utility, last Friday announced that it has signed a long term coal suppl ...
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- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Jindal Steel & Power Ltd - India
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- Indian Oil Corporation Limited
- Petron Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- Ambuja Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Toyota Tsusho Corporation, Japan
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- VISA Power Limited - India
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- The University of Queensland
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Ministry of Mines - Canada
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- Energy Link Ltd, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Bhatia International Limited - India
- PTC India Limited - India
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Orica Mining Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Coal and Oil Company - UAE
- Parliament of New Zealand
- Straits Asia Resources Limited - Singapore
- Bhoruka Overseas - Indonesia
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