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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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Friday, 11 March 16
ADANI GLOBAL BAGS 0.26 MILLION TONS OF COAL CONTRACT FROM LANKA COAL COMPANY
COALspot.com: Lanka Coal Company (Private) Limited, Sri Lanka has awarded 260,000 +/- 10% tons of Power plant 6300 GAR calorific value coal to Adan ...
Friday, 11 March 16
US WEEKLY COAL PRODUCTION DOWN BY 0.5 MMST
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 12.6 million shor ...
Friday, 11 March 16
FORTESCUE'S MOU WITH VALE COULD STRENGTHEN ITS BUSINESS PROFILE - FITCH
COALspot.com: Fitch Ratings says that Australia-based Fortescue Metals Group Limited's (BB+/Negative) memorandum of understanding (MOU) with Br ...
Thursday, 10 March 16
CHINA'S NEW POLICY PLAN COULD BE POSITIVE FOR SHIPPING, BUT TARGETS SEEM RATHER AMBITIOUS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
China set out its new policy plan during the course of the past weekend, but it seems to have set some very ambitious goals, which could be difficu ...
Thursday, 10 March 16
U.S. COAL EXPORTS DECLINED 23% IN 2015, AS COAL IMPORTS REMAINED STEADY
COALspot.com: The United States remains a net exporter of coal, exporting 74.0 million short tons (MMst) and importing 11 MMst in 2015.
Accord ...
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- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Latin American Coal - Colombia
- Planning Commission, India
- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Australian Coal Association
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- The University of Queensland
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- Indian Energy Exchange, India
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- PowerSource Philippines DevCo
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Chettinad Cement Corporation Ltd - India
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- MS Steel International - UAE
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Economic Council, Georgia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
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