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