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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, 29 October 10
CHINA'S COAL DEMAND DRIVES DRY BULK MARKET HIGHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is posting marginal, yet steady growth this week, with the Baltic Dry Index rising yesterday to 2784 points, up by 0.2%. Both th ...
Wednesday, 27 October 10
TNPL TO AWARD 240,000 MT COAL SUPPLY CONTRACT TO COAL & OIL
COALspot.com: Tamil Nadu Newsprint Papers Limited, Tamil Nadu state owned Newsprint and Printing & Writing Paper producer has opened a coal purc ...
Wednesday, 27 October 10
CHINA AIDS RUSSIA IN DEVELOPING COAL RESOURCES - PEOPLE'S DAILY
People's Daily reported that, Russia will use 6 billion U.S. dollars in loans provided by China to develop coal resources in Sakhalin Island, Elege ...
Wednesday, 27 October 10
MAIDEN COAL SHIPMENTS TO NOBLE RESOURCES - PAN ASIA AUSTRALIA
Press Release :
First Coal Shipments made from Nadvara Coal Project, East Kalimantan
51,616 tonnes delivered from October production &ndas ...
Tuesday, 26 October 10
INDONESIA SHIPPED 5.32 PERCENT LESS COAL IN SEPTEMBER 10
COALspot.com: Indonesia, the world largest coal exporter, shipped 21,661,817 MT of coal in September 2010, which is 5.32 percent lesser than Au ...
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- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- Wilmar Investment Holdings
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Deloitte Consulting - India
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Posco Energy - South Korea
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Georgia Ports Authority, United States
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Anglo American - United Kingdom
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Merrill Lynch Commodities Europe
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- White Energy Company Limited
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- McConnell Dowell - Australia
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- The University of Queensland
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- Karbindo Abesyapradhi - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Australian Coal Association
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Interocean Group of Companies - India
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
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