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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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Monday, 27 July 09
MIDDLE EAST COAL TO MOVE ON $1B EAST KALIMANTAN PROJECT
The Jakarta globe reported that, Middle East Coal reiterated on Monday that it would push ahead its $1 billion development program for East Kutai Re ...
Monday, 27 July 09
SHORT AND ONE YEAR PERIOD RATES FOR SUPRAMAX WAS FIRM AT AROUND US$ 18, 000 -18,500 PER DAY
COALspot.com (Singapore): The Supramax charter rates up sharply last week (ended 24th July 2009), especially India / Far East region said, Capt ...
Monday, 27 July 09
COKING COAL, IRON-ORE LIKELY TO BENEFIT NON-INTEGRATED STEEL PRODUCERS
Economictimes reported that, The second half of the financial year 2008-09 was one of the toughest periods for steel companies, especially the non-i ...
Monday, 27 July 09
GMR ENERGY BUYS EMCO POWERGEN SUBSIDIARY
DNA India reported that, Thane-based transformer manufacturer Emco Ltd has sold its stake in unlisted power generation subsidiary Emco Energy to Ban ...
Sunday, 26 July 09
CESC PLANS 2000 MW POWER PLANT IN BIHAR
Jai Bihar reported that, RPG flagship company CESC Ltd on Friday unveiled its plan to set up a 2,000 MW power generation plant at Pirpainti near Bha ...
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- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Planning Commission, India
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Coalindo Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Bharathi Cement Corporation - India
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- White Energy Company Limited
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Australian Coal Association
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Indika Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- Essar Steel Hazira Ltd - India
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- OPG Power Generation Pvt Ltd - India
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