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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, 17 August 15
INDONESIAN THERMAL COAL REFERENCE PRICE HITS RECORD LOW AGAIN!
COALspot.com - The Director General of Mineral and Coal of Indonesia revised down Indonesian coal benchmark price once again to US$ 59.14 per MT fo ...
Monday, 17 August 15
CFR SOUTH CHINA COAL SWAPS CONTINUE TO HEAD SOUTH
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined just US cents 40 (1.05%) per MT month over month.
A commodi ...
Sunday, 16 August 15
INDONESIA TO INDIA FREIGHT RATES ARE EXPECTED TO STEADY NEXT WEEK
COALspot.com: The BDI softened 12.08 per cent to 1055 points this week due to weakening of cape index which was fell 25 per cent week over week to ...
Friday, 14 August 15
FOB INDONESIA COAL SWAP SHOWING NO MOVEMENT THIS PAST WEEK
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and week over week, this past week.
The 4Q swap was declined $ ...
Friday, 14 August 15
U.S. COAL PRODUCTION UP 2.9 PER CENT THIS WEEK
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 18.2 million shor ...
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- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Coalindo Energy - Indonesia
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
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- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Posco Energy - South Korea
- Manunggal Multi Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Latin American Coal - Colombia
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Bharathi Cement Corporation - India
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- Jindal Steel & Power Ltd - India
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Standard Chartered Bank - UAE
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
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