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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, 10 February 11
SUPRA RATES IMPROVED A LITTLE OVER US$ 6K BSS N. CHINA DELIVERY FOR INDO-INDIA AND THAILAND ROUNDS - FEARNBULK
Handy
Atl is still weak with little fresh enquiry and an accumulation of spot tonnage.Owners are reluctant to send tonnage thru Suez due to uncert ...
Thursday, 10 February 11
BUKIT ASAM EXPECTS ABOVE RP 3 TRIO PROFIT
The state-owned coal miner PT Tambang Bukit Asam Tbk (PTBA) expects to reach 2011's net profit above Rp 3 trillion (US$ 336,322,568) from above Rp2 ...
Wednesday, 09 February 11
INDONESIA ALLOWED 60 COAL TRADING COMPANIES TO EXPORT COAL
COALspot.com - A temporary ban imposed on coal traders in January has lifted this week. As of today 60coal trading companies were allowed to resume ...
Tuesday, 08 February 11
INDIA'S SIMHAPURU TARGETS S.AFRICAN COAL - ECONOMIC TIMES
Economic Times reported that, India's Simhapuri Energy , a unit of the Madhucon Group , wants to buy new or existing collieries in South Africa fro ...
Tuesday, 08 February 11
PUSTAKA JAYA PALU POWER LOOKING FOR 5800 GAD COAL
COALspot.com - According to market information, PT Pustaka Jaya Palu Power, a power plant operator of the Mpanau plant, Palu, Sulawesi has invited c ...
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- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Parliament of New Zealand
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Deloitte Consulting - India
- Planning Commission, India
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Pipit Mutiara Jaya. PT, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- Latin American Coal - Colombia
- Binh Thuan Hamico - Vietnam
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Videocon Industries ltd - India
- The University of Queensland
- Goldman Sachs - Singapore
- Thai Mozambique Logistica
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- VISA Power Limited - India
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Chettinad Cement Corporation Ltd - India
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
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