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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
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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Tuesday, 05 May 09
INDONESIA'S ADARO PAYS $78.6 MLN FOR COAL-BARGING FIRM - REUTERS
INDONESIA's largest coal producer by market value, PT Adaro Energy Tbk, said late on Monday it paid $78.6 million for a 74 percent stake in Orchard ...
Tuesday, 05 May 09
PHILIPPINES SEMIRARA STILL EXPECTS HIKE IN COAL SALES - BUSINESS MIRROR
DESPITE the anticipated soft demand resulting from the prevailing global financial crisis, the country’s largest coal producer Semirara Mining ...
Monday, 04 May 09
VISTAAR SINGAPORE SAYS, THIS MONTH DRY BULK FREIGHT LIKELY TO COME DOWN
COALspot.com (Singapore) - VISTAAR shipping Services Pte Limited of Singapore, said, the beginning of last week started with bit of weakness an ...
Monday, 04 May 09
PNOC-EC TO GROW COAL OPERATIONS - PHILIPPINE DAILY INQUIRER
LISTED firm Philippine National Oil Co.-Exploration Corp. plans to expand its operations this year to ensure the steady supply of coal and fur ...
Saturday, 02 May 09
BUMI'S FIRST-QUARTER PROFIT RISES 21% ON COAL PRICE - BLOOMBERG
PT BUMI RESOURCES, Asia’s biggest exporter of power-station coal, said first-quarter profit rose 21 percent after it earned higher prices for ...
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- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Grasim Industreis Ltd - India
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Globalindo Alam Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- Madhucon Powers Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- VISA Power Limited - India
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Cement Manufacturers Association - India
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Minerals Council of Australia
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- IEA Clean Coal Centre - UK
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