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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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Friday, 22 May 09
INDONESIA`S BUKIT ASAM TO HAVE POWER PLANT IN 2011 - ANTARA
The construction of a power plant in South Sumatra by coal mining company PT Tambang Batubara Bukit Asam will be completed in April 2011.
T ...
Friday, 22 May 09
NOBLE WINS CONTROL OF AUSTRALIA'S GLOUCESTER COAL - BLOOMBERG
Noble Group Ltd., a Hong Kong- based commodity supplier, won control of Australia’s Gloucester Coal Ltd. after last week raising its cash bid ...
Thursday, 21 May 09
FBR STARTS COVERAGE OF SHIPPING SECTOR - REUTERS
Friedman Billings Ramsey began coverage of the shipping industry, saying the sector, which is amidst a deep cyclical downturn, is poised for a recov ...
Thursday, 21 May 09
INDONESIAN COAL PRODUCTION IN Q1 BELOW TARGET - STEEL GURU
Mr Bambang Gatot Ariyono director for coal and mineral development at the Energy and Mineral Resources Ministry said that the coal production in the ...
Wednesday, 20 May 09
COAL & OIL BAGS TWO CONTRACTS TO SUPPLY COAL TO CEMENT & SUGAR INDUSTRY IN INDIA
COALspot.com: According to website of Coal & Oil Company, Aditya Birla Group (Ultratech) have placed orders with Coal and Oil Company for supply ...
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- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Mjunction Services Limited - India
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- Orica Mining Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Economic Council, Georgia
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Baramulti Group, Indonesia
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Bhushan Steel Limited - India
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- GVK Power & Infra Limited - India
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- SMC Global Power, Philippines
- Bukit Baiduri Energy - Indonesia
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