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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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- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Goldman Sachs - Singapore
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Kumho Petrochemical, South Korea
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- The University of Queensland
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sical Logistics Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- MS Steel International - UAE
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Videocon Industries ltd - India
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Cigading International Bulk Terminal - Indonesia
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- VISA Power Limited - India
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Wilmar Investment Holdings
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Chettinad Cement Corporation Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Parliament of New Zealand
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
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