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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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Thursday, 12 July 12
SOUTHGOBI RESOURCES ANNOUNCES NOTICE OF INVESTMENT DISPUTE FILED AGAINST MONGOLIAN GOVERNMENT
Press Release - SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi”) announced today that SGQ Coal Investment Pte. Ltd., a wholly ...
Wednesday, 11 July 12
HBA DROPPED SHARPLY IN JULY
COALspot.com - Indonesian HBA fell to lowest level since September 2010 in July 2012. The monthly coal reference price for coal sales this mon ...
Wednesday, 11 July 12
SUB-BIT FOB INDONESIA COAL SWAP LOST $ 1.26 PER TON
COALspot.com - Sub-Bit FOB Indonesia Coal decline for a second day yesterday, according to SGX AsiaClear OTC Coal Swaps. The prices for shipments to ...
Tuesday, 10 July 12
DRY BULK MARKET RECORDS MODEST GAINS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched a bit higher on Monday, with the Baltic Dry Index (BDI) ending the session up by 5 points to 1,162. Most markets were hig ...
Saturday, 07 July 12
INDONESIA-JAPAN RELATIONS TURN SOUR - THE JAKARTA POST
The Jakarta Post, the one of the leading Indonesian English new papers reported that, Bilateral relations between Indonesia and Japan have recently ...
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- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- London Commodity Brokers - England
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Renaissance Capital - South Africa
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Bhushan Steel Limited - India
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Australian Coal Association
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- PTC India Limited - India
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Bangladesh Power Developement Board
- White Energy Company Limited
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- CNBM International Corporation - China
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Kaltim Prima Coal - Indonesia
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Karaikal Port Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- Romanian Commodities Exchange
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Petron Corporation, Philippines
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Planning Commission, India
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
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