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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, 14 January 10
INDIANS RESUME S. AFRICA COAL BUYING AGAINST INDEX - REUTERS
Indian trade buyers have resumed buying of South African prompt coal cargoes after a two-month hiatus but are opting for index-linked pricing, hopin ...
Wednesday, 13 January 10
STEAMING COAL SUPPLY SPOT CONTRACT FOR TAEAN POWER PLANT
COALspot.com (South Korea): Korea Western Power Co., Ltd is looking for total 1.12 million tons of Bituminous Coal for TAEAN Power Plant.
Accord ...
Wednesday, 13 January 10
INDONESIA ISSUES COAL, METAL DECREE
Indonesia has issued a ministerial decree which requires metal and coal miners to set aside a certain amount of their production for domestic needs, ...
Wednesday, 13 January 10
RESTING TIME FOR INDONESIAN COAL LOADING VESSELS
COALspot.com (Indonesia): 11 - 15 vessels are waiting in anchorages of Muara Berau and Tanjung Pemancingan to load total about 700,000 – ...
Wednesday, 13 January 10
SOUTH AFRICA STEAM COAL PRICE FALLS SHARPLY
Reuters reported that South African physical coal prices fell sharply on Tuesday with a March cargo trade at USD 87.5 a tonne FOB Richards Bay and d ...
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- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- Directorate Of Revenue Intelligence - India
- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Interocean Group of Companies - India
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- The University of Queensland
- Central Electricity Authority - India
- VISA Power Limited - India
- PTC India Limited - India
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Latin American Coal - Colombia
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- Minerals Council of Australia
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Jindal Steel & Power Ltd - India
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Gujarat Sidhee Cement - India
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