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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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Monday, 20 April 09
PT PAMAPERSADA SEES ITS REVENUE TO CLIMB BY 20% IN 2009 - STEELGURU
PT Pamapersada Nusantara, a unit of Indonesia's PT United Tractors, said that its 2009 profit will be similar to last year, even as it forecasts re ...
Monday, 20 April 09
NIPPON STEEL SEMI-SOFT COAL PRICE SAID TO DROP 67% - BLOOMBERG
Nippon Steel Corp., Japan’s largest mill, will pay up to 67 percent less for semi-soft coking coal this fiscal year, two industry executives w ...
Monday, 20 April 09
INTERNATIONAL INVESTORS SEEK TO SELL ADARO STAKES - MONEY.CNN
Some international investors in PT Adaro Energy ( ADRO.JK) have approached other companies to sell around a combined 17% stake in the coal miner via ...
Friday, 17 April 09
BHATIA COAL INDIA, VITOL IN DISPUTE - COAL JUNCTION
Bhatia Coal India, a subsidiary of the Bhatia International Group, terminated a coal supply contract with traders Vitol and has initiated arbitratio ...
Friday, 17 April 09
JSW TO BUY THERMAL COAL MINE IN AFRICA
Sajjan Jindal-led JSW Energy is close to acquiring a sub-Saharan African thermal coal mine, which has reserves of more than 200 million tons, to min ...
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- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Sarangani Energy Corporation, Philippines
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- PTC India Limited - India
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Ministry of Mines - Canada
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- White Energy Company Limited
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Global Green Power PLC Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Coal and Oil Company - UAE
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Semirara Mining Corp, Philippines
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Australian Coal Association
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
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