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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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Wednesday, 05 January 11
BUKIT ASAM TARGETS 20% BUY TO GROW COAL TRANSPORT CAPACITY - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesian coal producer Tambang Batubara Bukit Asam is considering buying an additional 20 percent stake in Bukit ...
Wednesday, 05 January 11
FLOODING IN AUSTRALIA WILL CAUSE COAL PRICES TO SPIKE AT LEAST 20 PERCENT
Rising coal prices are set to spike at least 20 per cent higher because of supply shortages due to severe flooding in Australia, adding cost pressur ...
Wednesday, 05 January 11
DRY BULK MARKET BEGINS NEW YEAR ON SOUR NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Seasonal factors like the worst flooding in Australia’s Queensland in half a century, coupled with thin trade activity has put the dry bulk ma ...
Tuesday, 04 January 11
THE WCI-CHINA ROUTE WAS TRADED IN THE MID US$ 10,000S - BRS DRY BULK
As reported by BRS Dry Bulk, after a stronger than expected performance in 2010, rates finished on a sombre note in December with the BDI at1,773 po ...
Tuesday, 04 January 11
BALI, INDONESIA HOST OF WORLD RENEWABLE ENERGY AND ENERGY EFFICIENCY CONFERENCE
Press Release - Indonesian Renewable Energy Society (METI – IRES) has launched the plan for organizing the international gathering ...
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- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- LBH Netherlands Bv - Netherlands
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Indian Energy Exchange, India
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- Xindia Steels Limited - India
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Australian Commodity Traders Exchange
- Indian Oil Corporation Limited
- Salva Resources Pvt Ltd - India
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Mercuria Energy - Indonesia
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- Heidelberg Cement - Germany
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
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