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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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Thursday, 08 September 11
TRADA MARITIME BUYS GUNUNG BARA UTAMA
Insider Stories reported that, PT Trada Maritime Tbk (TRAM) has purchased convertible bonds issued by PT Awesome Coal from Zakia Limited. The memora ...
Thursday, 08 September 11
PETROSEA ADDS US$730 MIO CONTRACT
Coal mining contractor PT Petrosea Tbk (PTRO), a majority owned subsidiary of energy integrated company PT Indika Energy Tbk (INDY), has secured a U ...
Wednesday, 07 September 11
ANOTHER EXCEPTIONALLY STRONG WEEK FOR THE CAPESIZE MARKET - BRS
The very strong rise in Cape rates pushed through an overall improvement in the BDI this week, although relatively little benefit from the Capes has ...
Wednesday, 07 September 11
INDIA HIT BY INDONESIAS COAL PRICE - TEMPO INTERACTIVE
TEMPO Interactive, an Indonesian online news portal reported that, The Indian government has complained about the price increase of Indonesian coal, ...
Wednesday, 07 September 11
SAMPUR POWER AGREEMENT SIGNED - DAILY NEWS
Daily News, Sri Lank's national news paper reported that, the agreement for the setting up of a 500 MW coal-fired power plant at Sampur, Trincomale ...
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- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Minerals Council of Australia
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- MS Steel International - UAE
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Economic Council, Georgia
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Alfred C Toepfer International GmbH - Germany
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- Kideco Jaya Agung - Indonesia
- Sarangani Energy Corporation, Philippines
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Planning Commission, India
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Jindal Steel & Power Ltd - India
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Sindya Power Generating Company Private Ltd
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