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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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Monday, 07 February 11
RBCT SHIPPED 28.67 PERCENT LESS COAL IN JANUARY
COALspot.com - Richards Bay Coal Terminal (RBCT) is the single largest export coal terminal in the world, shipped 4,389,925 MT of coal in January 20 ...
Sunday, 06 February 11
THE PANAMAX & SUPRAMAX FUTURES FOR 2011-2013 WAS AT AROUND US$ 16,500 & US$ 15,000 PER DAY RESPECTIVELY
COALspot.com - With the Chinese new year holidays this week, the market has been fairly quite as expected.
The BDI saw a bigger drop compared to ...
Saturday, 05 February 11
INDONESIAN ENERGY MINISTER HAS SIGNED A DECREE FOR COAL TRANSPORTATION PERMITS ON FRIDAY
COALspot.com - Minister of Energy, Darwin Minister Saleh said, that, he had signed a decree for transportation and sale of coal, which was the ...
Saturday, 05 February 11
ANCHORAGE LOADING POINT MOVED TO MUARA JAWA
COALspot.com - The Ministry of Transportation Republic Indonesia has announced that, the loading point at Muara Berau, East kalimantan h ...
Friday, 04 February 11
PERTAMINA DENIES KAREN AGUSTIAWAN RESIGNS FROM PERTAMINA
COALspot.com - The President Director of PT Pertamina, Karen Agustiawan reportedly will replace Darwin Saleh as Minister of Energy and Mineral Resou ...
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- Anglo American - United Kingdom
- VISA Power Limited - India
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- Bahari Cakrawala Sebuku - Indonesia
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Lanco Infratech Ltd - India
- Goldman Sachs - Singapore
- Maheswari Brothers Coal Limited - India
- Jindal Steel & Power Ltd - India
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Wilmar Investment Holdings
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- London Commodity Brokers - England
- Cigading International Bulk Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
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