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