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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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Monday, 09 November 15
CFR SOUTH CHINA THERMAL COAL SWAP FOR Q3' 16 CONTRACT DECLINED US$ 4 PER TON
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 4.35 (9.03 %) per ton month over month.
A commodity swa ...
Monday, 09 November 15
INDIAN THERMAL COAL IMPORTS SURGED 18%; COKING COAL 6.31% DURING APRIL-OCTOBER: BUSINESS-STANDARD
Indian thermal coal imports surged 18% at the country's top 12 major ports to 55.90 million tonnes (MT) in the first seven months of the curren ...
Sunday, 08 November 15
THE FREIGHT MARKET KEEP DROPPING THIS WEEK - VISTAAR
COALspot.com: The freight market keep dropping this week.
The BDI down 12.48 percent week on week and closed at 631 points on 6 November 2015. ...
Sunday, 08 November 15
CAPESIZE FREIGHT RATES IN AUSTRALIA-CHINA ROUTES OVER 50% CHEAPER THAN BRAZIL-CHINA ROUTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
China’s mining and steel industries are facing tectonic shifts over the past couple of years, with the country’s limiting of coal use, ...
Friday, 06 November 15
COAL PRODUCTION IN THE U.S. FELL SHARPLY FOR THE WEEK ENDING OCTOBER 31
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 16.6 million shor ...
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- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- PTC India Limited - India
- Malabar Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Vedanta Resources Plc - India
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Singapore Mercantile Exchange
- Mercuria Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Economic Council, Georgia
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Gujarat Sidhee Cement - India
- Trasteel International SA, Italy
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Jaiprakash Power Ventures ltd
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