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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, 10 October 11
MOZAMBIQUE CHANNEL TO BE THE NEW PIRACY HOTSPOT FOR THIS YEAR SAYS MARITIME SECURITY EXPERT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The Mozambique Channel, as well as the entrance to the Persian Gulf, are expected to become some of the new pirate hotspots for piracy, says Richard ...
Sunday, 09 October 11
FREIGHT MARKET ENDED WITH A POSITIVE DIRECTION - VISTAAR
COALspot.com - The market ended with a positive note with all the segments up except for handy size. The biggest gainer was Panamax index up by 11 p ...
Saturday, 08 October 11
INDONESIAN MINER PLANS $167M IPO TO FUEL SUMATRA COAL BOOM - JG
The Jakarta Globe reported that, coal miner Atlas Resources aims to raise as much as Rp 1.5 trillion ($167 million) in an initial public offering to ...
Friday, 07 October 11
MINING REGULATIONS , OBSTACLES AND GROWTH : INDIA VS INDONESIA - SUNIL K KUMBHAT
COALspot.com - The Govt of India has passed long pending Mines & Minerals (Regulation and Development) Bill, 2011, which seeks to replace ...
Friday, 07 October 11
$100M FOR EXPANSION INTO KALIMANTAN MINING: AKR
The Jakarta Globe, one of the leading English news paper in Indonesia reported that, AKR Corporindo, a fuel and chemical distributor, has set aside ...
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- Central Java Power - Indonesia
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- White Energy Company Limited
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- The University of Queensland
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
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