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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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Thursday, 19 August 10
INDONESIA EXPORTED 5.93 MLN TON OF COAL TO CHINA AND 3.52 MLN TONS TO INDIA IN JULY
COALspot.com: Indonesia shipped 3.52 million tones of thermal coal to India in July, fell 25.39 percent compared to June's exports of 4.71 million ...
Thursday, 19 August 10
WBPDCL INDIA LAUNCHES SPOT COAL TENDER
COALspot.com: The West Bengal Power Development Corporation Limited (WBPDCL ), A Govt. of West Bengal Enterprise, has launched spot contract tender ...
Thursday, 19 August 10
PANAMAX BACKED BY A STRONGER SHORT PERIOD MARKET AND SUPPORTED BY SOME FRESH REQUIREMENTS - FEARNBULK
Handy
The events of this week have confirmed our assessment of last week i.e. activity gradually picked up in the Atlantic with more enquiry seen ...
Thursday, 19 August 10
CSC TO SHIP COAL FOR NOROCHCHOLAI POWER PLANT
Daily Mirror reported that, coal for the Norochcholai Power Plant will be shipped to the country by the Ceylon Shipping Corporation (CSC) officials ...
Wednesday, 18 August 10
MADHUCON TO START MINING AT SUMATRA BLOCK IN 2-3 MONTHS
DNA India reported that, Hyderabad-based Madhucon Projects is set to begin mining at one of its coal blocks in Indonesia in 2-3 months, said S Vaiku ...
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- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Interocean Group of Companies - India
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Riau Bara Harum - Indonesia
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- PNOC Exploration Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Planning Commission, India
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Rio Tinto Coal - Australia
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- PTC India Limited - India
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Eastern Energy - Thailand
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
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