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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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Saturday, 12 November 11
BBJ WILL RELEASE A COAL CONTRACT
Jakarta Futures Exchange will soon release a coal futures contracts during the quarter 1 / 2012.
Director of the Jakarta Futures Exchange (BBJ) S ...
Saturday, 12 November 11
DRY BULK MARKET REGAINS SOME OF THE LOST GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market managed to edge forward yesterday, putting an end and halting the losses accumulated over the course of the past weeks, which ha ...
Friday, 11 November 11
PETROCOM ENERGY PLANS $40M TO BUILD COAL PLANT IN CILEGON - JP
The Jakarta Post reported that, Hong Kong-based Petrocom Energy Ltd has unveiled plans to invest up to US$40 million on a proposed coal-blending fac ...
Friday, 11 November 11
GOVT WAITS LEGAL DECISION ON BUKIT ASAM, ADARO DISPUTE - JP
The Jakarta Post reported that, The government says that it will not interfere in the settlement process of the dispute between state coal miner PT ...
Thursday, 10 November 11
INDONESIAN REFERENCE COAL PRICE FELL AGAIN
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has set the November 2011 Indonesian Coal Reference Price for thermal coal at U ...
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- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Therma Luzon, Inc, Philippines
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- The University of Queensland
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Marubeni Corporation - India
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- SN Aboitiz Power Inc, Philippines
- ASAPP Information Group - India
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- Economic Council, Georgia
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- Commonwealth Bank - Australia
- Planning Commission, India
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
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