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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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Sunday, 18 September 11
THE COAL IMPORTS TO INDIA, OUT OF INDONESIA LIKELY TO PICK UP - CAPT. REDDY
COALspot.com - The freight market continued the upward trend until midweek almost touching 2,000 points, however towards second half of the week the ...
Saturday, 17 September 11
GVK ACQUIRES HANCOCK COAL AND INFRASTRUCTURE FOR US$ 1.26 BILLION
COALspot.com - GVK group, India’s leading infrastructure developer,confirmed arrangements for the acquisition of a strategic part of large, hi ...
Saturday, 17 September 11
INDIA'S GVK ACQUIRES HANCOCK COAL AND INFRASTRUCTURE PROJECTS IN AUSTRALIA
COALspot.com - GVK group, India’s leading infrastructure developer, today confirmed arrangements for the acquisition of a strategic part of la ...
Friday, 16 September 11
DELTA DUNIA MAKMUR REMOVED 30.9 MILLION BCM OVERBURDEN IN AUGUST 2011
COALspot.com - PT. Delta Dunia Makmur Tbk has removed 30.9 million bcm (+13.2% YoY) overburden in August 2011 while coal production was at 2.9 ...
Thursday, 15 September 11
RUSSIAN COAL EXPORTS UP 10.9% IN JAN-AUG TO 71.50 MILLION TONS - PORT NEWS / HELLENIC SHIPPING
Port News reported that, Coal exports from Russia in January-August 2011 grew by 10.9% compared with the same period last year, to 71.50 million ton ...
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- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Star Paper Mills Limited - India
- The University of Queensland
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Planning Commission, India
- VISA Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- Orica Australia Pty. Ltd.
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- Mjunction Services Limited - India
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Samtan Co., Ltd - South Korea
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