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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, 02 August 10
LINC, ADANI COMPLETE THEIR COAL CONNECTION
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Saturday, 31 July 10
TABONEO ANCHORAGE TO LOAD 1.5 MLN TON OR MORE COAL IN H1 AUGUST
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Federal government forecasts of continued strength in iron ore and coal prices, which underpin revenue expectations for the proposed new mining tax, ...
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- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- VISA Power Limited - India
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Merrill Lynch Commodities Europe
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Ambuja Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- White Energy Company Limited
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- Planning Commission, India
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
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