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