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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, 19 October 11
ADARO ACQUIRES BUKIT ENIM ENERGI - INSIDER STORIES
Insider Stories reported that, Coal miner PT Adaro Energy Tbk, via its subsidiary dubbed PT Alam Tri Abadi, today revealed a 46% stake takeover of a ...
Tuesday, 18 October 11
INDONESIAN PRESIDENT APPOINTS JERO WACIK AS NEW MINISTER OF ENERGY & MINERAL RESOURCES
COALspot.com - Jero Wacik has been appointed as minister of energy and mineral resources of Indonesia replacing Darwin Saleh and Prof. Widjajono Par ...
Tuesday, 18 October 11
DELTA DUNIA MAKMUR HAS PRODUCED 3.0 MILLION TONS OF COAL LAST MONTH
COALspot.com - PT. Delta Dunia Makmur, wholly owned subsidiary, PT Bukit Makmur Mandiri Utama (BUMA), Delta Dunia Makmur has removed 1.4 million bcm ...
Monday, 17 October 11
KOWEPO TO BUY 260,000 MT BITUMINOUS COAL
COALspot.com - KOWEPO has issued a spot tender for 260,000MT of minimum 5,600kcal/kg NAR Bituminous Coal.
The tender document also mentioned tha ...
Monday, 17 October 11
CAPESIZE SHIPPING COSTS CLIMB TO 10-MONTH HIGH ON ORE IMPORTS
The cost to hire capesize vessels climbed to a 10-month high as rising imports of iron ore to China boosted demand for the ships.Monthly iron-ore sh ...
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- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Central Electricity Authority - India
- London Commodity Brokers - England
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Wilmar Investment Holdings
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- CNBM International Corporation - China
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- Economic Council, Georgia
- Interocean Group of Companies - India
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Mjunction Services Limited - India
- Coal and Oil Company - UAE
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Ministry of Mines - Canada
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Independent Power Producers Association of India
- White Energy Company Limited
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Energy Development Corp, Philippines
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Global Business Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Australian Coal Association
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- The University of Queensland
- Dalmia Cement Bharat India
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- PTC India Limited - India
- Semirara Mining Corp, Philippines
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
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