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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, 10 April 10
VESSELS OPEN N. CHINA WERE SEEN FIXED AT HIGH TEENS FOR TRIP VIA INDONESIA TO INDIA - VISTAAR SINGAPORE
COALspot.com: The BDI indices was almost at same levels was down by only 2.6 pct.
The cape index was down by almost 13 pct, which appears to be s ...
Saturday, 10 April 10
KRISHNAPATNAM PORT GROWS BY ALMOST 100% IN ITS SECOND YEAR OF OPERATIONS
COALspot.com ( Press Release): It has been a year of setting numerous records for Krishnapatnam Port. Krishnapatnam Port is only in its second year ...
Saturday, 10 April 10
TRANS-ASIA SEEKS SEMIRARA, INDO SUPPLIERS FOR COAL POWER PLANT - MANILA STANDARD TODAY
Manila Standard Today reported that, Trans-Asia Oil & Energy Development Corp., a unit of the Phinma Group, will tap Semirara Mining Corp. ...
Thursday, 08 April 10
THE FAR EAST SHIPPING MARKET FIRMING SINCE THE LAST WEEK
Handy
Little fresh interest early this week after the holidays. The BSI saw yest ...
Thursday, 08 April 10
INDONESIAN ENERGY MINISTRY SEEKS LONGER MINING CONTRACTS - THE JAKARTAGLOBE
The Jakarta Globe reported that, Energy Minister Darwin Zahedy Saleh said he would seek to amend the mining law to address investors’ complain ...
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- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Jorong Barutama Greston.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Aditya Birla Group - India
- Deloitte Consulting - India
- White Energy Company Limited
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- MS Steel International - UAE
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Manunggal Multi Energi - Indonesia
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Australian Coal Association
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- VISA Power Limited - India
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Renaissance Capital - South Africa
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- CNBM International Corporation - China
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- PTC India Limited - India
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
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