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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, 10 December 15
CANADIAN MINER TECK ANNOUNCES LNG HAUL TRUCK PILOT PROJECT
Teck Resources Limited is piloting the use of liquefied natural gas (LNG) as a fuel source in six haul trucks at its Fording River steelmakin ...
Thursday, 10 December 15
FOB RICHARDS BAY COAL Q3' 16 DELIVERY SWAP WAS CLOSED 7.27% PER TON LOWER COMPARED TO AVERAGE Q1' 16 DELIVERY PRICE
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q1’ 2016 decline month over month and week over week.
The Q1’ 2016 &nbs ...
Wednesday, 09 December 15
U.S. COAL EXPORTS DECLINE IN 2015 DUE TO SLOWER GROWTH IN WORLD COAL DEMAND AND LOWER INTERNATIONAL COAL PRICES - EIA
COALspot.com: The slower growth in world coal demand and lower international coal prices have contributed to a decline in U.S. coal exports in 2015 ...
Wednesday, 09 December 15
DRY BULK EXPERIENCES THE PERFECT STORM - PANOS TSILINGIRIS
Dry bulk experiences the perfect storm as the slowing of demand predominantly because of China sat atop the exaggerated oversupply. The BDI broke t ...
Tuesday, 08 December 15
OPEC'S DECISION BODES WELL FOR THE TANKER MARKET: STRONG MIDDLE EAST CRUDE EXPORTS WILL CONTINUE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
OPEC’s latest decision to keep up oil production is seen by shipbrokers as a further boost for the tanker market. At the end of last year OPE ...
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- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- PTC India Limited - India
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- Petron Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tamil Nadu electricity Board
- Bulk Trading Sa - Switzerland
- Ministry of Mines - Canada
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- Gujarat Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Indian Oil Corporation Limited
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- The University of Queensland
- Jindal Steel & Power Ltd - India
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
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