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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, 17 May 16
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Monday, 16 May 16
INDONESIAN WEEKLY COAL INDICES AT POSITIVE LEVELS - CS (I) COAL INDEX
COALspot.com: Average 5000 GAR coal index of Indonesian origin up 0.31 percent week over week to averaging $38.94 per ton this past week, shows CS ...
Monday, 16 May 16
OPEC SEES RIVAL OIL PRODUCTION DECLINING
Crude Oil Price Movements
The OPEC Reference Basket averaged $37.86/b in April, a gain of $3.21 or 9.3%. This was 40% higher than the lows reache ...
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- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Xindia Steels Limited - India
- Mercator Lines Limited - India
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- Commonwealth Bank - Australia
- Deloitte Consulting - India
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- The University of Queensland
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- Medco Energi Mining Internasional
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- Marubeni Corporation - India
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- MS Steel International - UAE
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- VISA Power Limited - India
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- Wood Mackenzie - Singapore
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- San Jose City I Power Corp, Philippines
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- Planning Commission, India
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- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Tamil Nadu electricity Board
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- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Indogreen Group - Indonesia
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- Standard Chartered Bank - UAE
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- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
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- IHS Mccloskey Coal Group - USA
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- Minerals Council of Australia
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- Georgia Ports Authority, United States
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- GMR Energy Limited - India
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- Thiess Contractors Indonesia
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
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- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- Electricity Authority, New Zealand
- White Energy Company Limited
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
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- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
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- The Treasury - Australian Government
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
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- Parliament of New Zealand
- IEA Clean Coal Centre - UK
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- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
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- Straits Asia Resources Limited - Singapore
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- Agrawal Coal Company - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
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- London Commodity Brokers - England
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
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