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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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Friday, 12 November 10
BANPU'S NET PROFIT HAS INCREASED 249 PERCENT IN 3Q 2010 COMPARED TO THE SAME PERIOD LAST YEAR
COALspot.com: Banpu Public Company Limited (BANPU) reports its financial performance for the third quarter 2010, posting a net profit of THB 13,293 ...
Friday, 12 November 10
DRY BULK MARKET STILL ON A FREEFALL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market failed to show any signs of life this week, with the Baltic Dry Index (BDI) still being on the red, now stretching more than 11 ...
Thursday, 11 November 10
KOMIPO WANTS 400KT OF SUB BITUMINOUS COAL
COALspot.com : Korea Midland Power Co. Ltd. (KOMIPO) is looking for 400,000 MT of sub bituminous coal through International open bidding. The delive ...
Wednesday, 10 November 10
NTPC TO IMPORT 12 MILLION TONS OF COAL IN 2011
COALspot.com: India's State Trading Corp Ltd a public sector Govt of India co. is looking for 12 million tones (+/- 2%) of imported coal for NTPC. ...
Tuesday, 09 November 10
NOBLE GROUP APPOINTED AS THE EXCLUSIVE MARKETING AGENT FOR PT. BERAU COAL
COALspot.com: Noble Group Limited has recently been appointed as the exclusive marketing agent for PT. Berau Coal production exported to internation ...
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- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Miang Besar Coal Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- White Energy Company Limited
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Ministry of Transport, Egypt
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Mercator Lines Limited - India
- Marubeni Corporation - India
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Trasteel International SA, Italy
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Sindya Power Generating Company Private Ltd
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Economic Council, Georgia
- ASAPP Information Group - India
- Siam City Cement - Thailand
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Interocean Group of Companies - India
- Riau Bara Harum - Indonesia
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Power Finance Corporation Ltd., India
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- Anglo American - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Maheswari Brothers Coal Limited - India
- Samtan Co., Ltd - South Korea
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- Planning Commission, India
- MS Steel International - UAE
- Merrill Lynch Commodities Europe
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
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