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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, 09 July 09
COAL AND OIL GROUP TO INVEST $300 MN TO BUY SHIPS AND ACQUIRE COAL MINE
Coal & Oil Group is planning to invest around $300 million (around Rs 1,500 crore) to buy new ships and to acquire coal mines. The company is pl ...
Thursday, 09 July 09
NO TRADE ON AUSTRALIA'S ASX COAL FUTURES DEBUT
*ASX's deliverable thermal coal futures debut without trade
*ASX says futures could present new arbitrage opportunities
The debut of Australia ...
Wednesday, 08 July 09
GERMAN COAL PRODUCTION DECREASED BY 31% TO ROUND 3.4 MILLION TON IN 1Q 2009 - COAL IMPORTERS ASSOCIATION, HAMBURG
COALspot.com (Germany):
World Coal Market
According to analysis of VEREIN DER KOHLENIMPORTEURE E.V. , On a quantity basis the s ...
Wednesday, 08 July 09
HUADIAN POWER BUYS INTO COAL MINERS
Huadian Power International Corporation - China's largest independent power producerCannounced Tuesday in a filing to the Shanghai Stock Exchange ...
Tuesday, 07 July 09
RICHARDS BAY TERMINAL COAL EXPORTS ROSE 7.2% IN JUNE
Richards Bay Coal Terminal Ltd., Africa’s largest coal-export facility, said shipments rose 7.2 percent in June from a year earlier.
Export ...
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- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Mjunction Services Limited - India
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- White Energy Company Limited
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- London Commodity Brokers - England
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- Power Finance Corporation Ltd., India
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Siam City Cement PLC, Thailand
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Videocon Industries ltd - India
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- PowerSource Philippines DevCo
- Gujarat Mineral Development Corp Ltd - India
- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Australian Coal Association
- The University of Queensland
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- Eastern Energy - Thailand
- Aditya Birla Group - India
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
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