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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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Wednesday, 18 March 09
MANILA'S NAPOCOR SAYS BIDDING FOR 100,000T COAL FAILS - REUTERS
Top Philippine electricityproducer National Power Corp (Napocor) was unable to secure 100,000 tonnes of local coal for one of its power plantsfollow ...
Wednesday, 18 March 09
INDONESIA'S PLN APPOINTS KPC TO SUPPLY COAL - REUTERS
State electricity firm Perusahaan Listrik Negara (PLN) appointed PT Kaltim Prima Coal to supply 1 million tonnes of coal per annum to Tanjung Jati B ...
Monday, 16 March 09
TATA POWER HAS NO PLAN TO SELL STAKE IN INDONESIA BUMI MINES - BLOOMBERG
Tata Power Co., India’s biggest electricity generator outside state control, said it has “no intention” to sell its stake in two I ...
Monday, 16 March 09
ANTAM SELECTS PARTNERS FOR POMALAA POWER PLANT - THE JAKARTA POST
PT Aneka Tambang Tbk, Indonesia’s second-largest nickel producer, said it intended to develop a $300 million coal-fired plant in Pomalaa, Sout ...
Monday, 16 March 09
ADARO TO BOLSTER SUPPLY CHAIN THROUGH ACQUISITIONS - THE JAKARTA POST
PT Adaro Energy Tbk, Indonesia's second-largest coal producer, plans to acquire a coal barging and transshipment company to improve its supply chai ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- McConnell Dowell - Australia
- PowerSource Philippines DevCo
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- Aditya Birla Group - India
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- The University of Queensland
- Banpu Public Company Limited - Thailand
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Kumho Petrochemical, South Korea
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Parry Sugars Refinery, India
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Wilmar Investment Holdings
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
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