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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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Saturday, 26 March 11
ADARO AIMS TO DOUBLE COAL PRODUCTION -THE JAKARTA POST
The Jakarta Post reported that, coal producer PT Adaro Indonesia is planning to soon boost its production capacity to 80 million tons annually, almo ...
Friday, 25 March 11
KNOWLEDGE INFRASTRUCTURE TO BAG 160,000 MT COAL SUPPLY ORDER FROM TNPL
COALspot.com - Delhi based Knowledge infrastructure Systems Pvt. Ltd offered lowest price of US$ 97.10 per metric ton for calorific value of 6000 GA ...
Friday, 25 March 11
THE CAPESIZE MARKET CONTINUED TO FALL - FEARNBULK
Handy
The Atlantic market remains stable with more activity from the Black Sea to Feast paying in the mid 20´s on supras.
The USG remain ...
Friday, 25 March 11
BORNEO ENERGI FY10 NET INCOME SOARS - INSIDER STORIES
Coking coal producer PT Borneo Lumbung Energi Tbk (BORN) booked a skyrocket net income by 499.72% from net loss position in 2009, as quoted by Insid ...
Thursday, 24 March 11
INDIA'S CHETTINAD INTERNATIONAL COAL TERMINAL'S PERMISSIBLE DRAFT HAS INCREASED TO 13.5 M
COALspot.com - Chettinad International Coal Terminal in Ennore port has the berth with draft 13.5 Meters now, according to E-Mail statement received ...
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- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- ASAPP Information Group - India
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Sindya Power Generating Company Private Ltd
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Borneo Indobara - Indonesia
- The University of Queensland
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
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