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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, 29 August 12
COLOMBIA'S MINING BOOM: PART ONE - JOSEPH KIRSCHKE
COALspot.com - Colombia stands before one of the potentially largest, most diversified mining booms in the world. Untold reserves of gold, coal, cop ...
Wednesday, 29 August 12
SECOND HAND VESSELS IN HIGH DEMAND DESPITE SUMMER SEASON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Despite the slow summer season, ship owners appear to be rather keen in acquiring some modern second hand tonnage at "knock-down" prices. ...
Monday, 27 August 12
BUMI BOOKS $322.1 MILLION NET LOSS IN 1H 2012 IN SPITE OF 8.6 PERCENT INCREASE IN SALES REVENUE
PT Bumi Resources Tbk, the single largest coal producer and exporter in Indonesia announces its first half financial report for the ...
Monday, 27 August 12
OVER 200 FOREIGN COMPANIES AND ENERGY MAJORS EXPECTED AT 2ND MOGP SUMMIT IN YANGON
Singapore based CMT and Machinery & Solutions Co. Ltd (M&S) announce that the 2nd MOGP Summit will be held on 3-6 September at the Sedona ho ...
Sunday, 26 August 12
SOUTH AFRICAN COAL OVERVIEW
South Africa's indigenous energy resource base is dominated by coal.
Internationally, coal is the most widely used primary fuel, accounting for ...
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- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Xindia Steels Limited - India
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
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- India Bulls Power Limited - India
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- The University of Queensland
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- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
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- Electricity Generating Authority of Thailand
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- MS Steel International - UAE
- Merrill Lynch Commodities Europe
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- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- PTC India Limited - India
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Baramulti Group, Indonesia
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Globalindo Alam Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- Minerals Council of Australia
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Aditya Birla Group - India
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