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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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Saturday, 24 July 10
INDONESIAS BUKIT ASAM H1 2010, SALES RAISED 10% TO 6.44 MILLION TONS
COALspot.com: PT Tambang Batubara Bukit Asam (PTBA), Indonesian state owned mining company’s H1 2010, sales raised 10% to 6.44 million tons. T ...
Saturday, 24 July 10
INDONESIAN COAL MINERS ARE REQUIRED TO SUPPLY 64.96 MLN TONS OF COAL TO DOMESTIC MARKET IN 2010
COALspot.com : Minister of Energy and Mineral Resources of Indonesia has issued a ministerial degree related to Domestic market obligation (DMO) for ...
Saturday, 24 July 10
THE BDI SEEMS TO BE RECOVERING AND WAS UP BY ABOUT 6 PCT - CAPT. REDDY
COALspot.com: "The BDI seems to be recovering and was up by about 6 pct this week after losing for almost last 7 weeks", said Capt. Reddy, ...
Saturday, 24 July 10
ANALYSIS - GROWTH IN VESSEL SUPPLY PRESSURES OCEAN FREIGHT RATES
It's common to use global shipping rate trends as a proxy of global economic health. If demand for goods and raw materials are strong, so should it ...
Friday, 23 July 10
KOWEPO TO IMPORT ADDITIONAL 1.2 MILLION TONS OF INDONESIAN COAL WITHIN 5 MONTHS
Korea Western Power Company Limited has finalized around 1.2 million tonnes of Indonesian origin of coal last week. According to K ...
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- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- SN Aboitiz Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Tata Chemicals Ltd - India
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- White Energy Company Limited
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Kideco Jaya Agung - Indonesia
- Sarangani Energy Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Ind-Barath Power Infra Limited - India
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Indian Energy Exchange, India
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
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