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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, 12 October 16
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Wednesday, 12 October 16
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Monday, 10 October 16
INDONESIAN COAL PRICE REFERENCE HITS HIGHEST LEVELS SINCE SEPTEMBER 2014
COALspot.com: The Indonesia coal benchmark price hits to its highest level since September 2014. The government declared benchmark prices for Indon ...
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THE FREIGHT MARKET FIRMS UP ON STRONG CAPE PERFORMANCE
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose again and ending in a positive note this past week. ...
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- Central Electricity Authority - India
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Petron Corporation, Philippines
- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Siam City Cement PLC, Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- The University of Queensland
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
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