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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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Saturday, 02 May 09
COAL PRICES TO RISE ON CHINESE SUPPLY, INDIAN DEMAND, UBS SAYS
Peter Hickson, an analyst with UBS AG in London, comments on prices for thermal coal, burned to generate power. He commented in a report today.
& ...
Friday, 01 May 09
DEUTSCHE, BECKKETT CLAIMING ADARO WIN - THE JAKARTA GLOBE
Both Deutsche Bank AG and Beckkett, an investment firm controlled by Indonesian tycoon Sukanto Tanoto, claimed victory on Tuesday after Singapore&rs ...
Thursday, 30 April 09
SAN MIGUEL IN TALKS TO BUY STAKE IN ADARO - REUTERS
San Miguel Corp is in talks to buy a stake worth about $500 million in Adaro Energy , Indonesia's largest coal producer by market value, the Philip ...
Wednesday, 29 April 09
BAYAN READY TO OPERATE WORLD'S LARGEST COAL QUALITY IMPROVEMENT FACILITY - MAJALAH TAMBANG
PT. Bayan Resources Tbk. (hereinafter referred to as Bayan), an Indonesian coal manufacturer, announced that they are ready to operate the world's ...
Wednesday, 29 April 09
NEW GOV'T REGULATION SHOULD INCORPORATE CONFLICT SETTLEMENT BODY - ICMA (MAJALAH TAMBANG)
A draft government regulation on mineral and coal is currently in a process of completion. The Indonesian Coal Mining Association (ICMA) proposed th ...
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- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- The University of Queensland
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Singapore Mercantile Exchange
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- Malabar Cements Ltd - India
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Parliament of New Zealand
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Bhatia International Limited - India
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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