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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, 24 December 09
EUROSEAS LTD. ANNOUNCES TWO-YEAR TIME CHARTER AGREEMENT FOR PANAMAX BULK CARRIER
Euroseas Ltd., an owner and operator of drybulk carriers and container vessels and provider of seaborne transportation for dry bulk and containerize ...
Wednesday, 23 December 09
INDONESIA POWER CHIEF TO BUILD PLANTS OUTSIDE JAVA
Indonesia's state electricity firm plans to build new power plants outside Java island with a combined capacity of around 2,000 megawatts to resolv ...
Wednesday, 23 December 09
BUKIT ASAM SEES CHINA COAL DEMAND BOOST
* Rebound in prices to have pushed up 2009 revs
* To more than double Tarahan port capacity
Reuters reported that, Indonesian state-owned coal m ...
Wednesday, 23 December 09
MACARTHUR COAL OFFERS TO BUY RIVAL GLOUCESTER
Queensland-based Macarthur Coal will offer to buy fellow Australian Gloucester Coal, in a move to add two new mines and increase coal resources.
...
Tuesday, 22 December 09
CHINA CONTRACTED COAL PRICE FOR 2010 SEES SLIGHT INCREASE
A number of coal and power enterprises have concluded their annual power-coal supply contracts for 2010, and the contracted coal price saw slight in ...
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- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Interocean Group of Companies - India
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Ministry of Finance - Indonesia
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- PTC India Limited - India
- MS Steel International - UAE
- Cement Manufacturers Association - India
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Dalmia Cement Bharat India
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Kobexindo Tractors - Indoneisa
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
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