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