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