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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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- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Minerals Council of Australia
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Posco Energy - South Korea
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- Sree Jayajothi Cements Limited - India
- Makarim & Taira - Indonesia
- Bukit Baiduri Energy - Indonesia
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- Metalloyd Limited - United Kingdom
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- Power Finance Corporation Ltd., India
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Electricity Authority, New Zealand
- Indian Oil Corporation Limited
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Goldman Sachs - Singapore
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
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