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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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Monday, 11 October 10
COAL IMPORTS TO START IN 2015 - VIETNAM BUSINESS
Vietnam Business reported that, Viet Nam is now likely to import coal only from 2015, not 2013 as earlier forecast since many thermal power pl ...
Monday, 11 October 10
OCTOBER INDONESIAN COAL PRICE REFERENCE UP BY 2.92 PERCENT
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
Saturday, 09 October 10
MPPGCL SEEKS TO BUY 0.40 MLN MT OF COAL FOR ITS THERMAL POWER STATIONS
COALspot.com: India's Madhya Pradesh Generating Company Limited (MPPGCL), Jabalpur, Madhya Pradesh invites bidders through tender 07-03/Import/Coal ...
Saturday, 09 October 10
FREIGHT MARKET IS EXPECTED TO FIRM UP NEXT WEEK CAPT REDDY
COALspot.com: Inspite of Chinese holidays the BDI was up by 10 pct and closed at 2,696 points. The cape index shot up to 20 pct and closed at 4,076 ...
Saturday, 09 October 10
9TH ASIA PACIFIC MINING CONFERENCE & EXHIBITION 13 14 OCTOBER 2010 AT SHANGRI-LA HOTEL, JAKARTA.
COALspot.com: (Press Release) In October 2010, the Indonesian Mining Association (IMA) and the Indonesian Coal Mining Association (APBI) will host t ...
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- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- TNB Fuel Sdn Bhd - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- Alfred C Toepfer International GmbH - Germany
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Karaikal Port Pvt Ltd - India
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Bulk Trading Sa - Switzerland
- Ambuja Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- McConnell Dowell - Australia
- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- Latin American Coal - Colombia
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- Kobexindo Tractors - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Xindia Steels Limited - India
- White Energy Company Limited
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Star Paper Mills Limited - India
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
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