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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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Tuesday, 12 April 16
NO FURTHER SIGNIFICANT COAL PRICE DECLINES IN THE FUTURE - FITCH
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Monday, 11 April 16
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Monday, 11 April 16
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Monday, 11 April 16
FORTY INDIAN COAL IMPORTERS UNDER THE DRI SCANNER FOR OVER-INVOICING : HINDU BUSINESS LINE
The Finance Ministry and the Directorate of Revenue Intelligence (DRI) of India are said to have stepped up investigations into the alleged over-in ...
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- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Tata Chemicals Ltd - India
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Interocean Group of Companies - India
- Australian Coal Association
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Larsen & Toubro Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- ASAPP Information Group - India
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement PLC, Thailand
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- The University of Queensland
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
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