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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, 02 February 15
INDONESIA'S ADARO ENERGY PRODUCED 56.21 MILLION TONNES OF COAL IN 2014; UP 8% Y-O-Y
COALspot.com: PT. Adaro Energy, Indonesia’s largest coal producer, has increased coal production by 8% to 56.21 million tonnes (Mt) from both ...
Monday, 02 February 15
API 8 CFR SOUTH CHINA COAL SWAP PICKS UP W-O-W
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery declined US$ 0.81 (-1.36%) per MT month over month and gained US$ 0.18&nb ...
Monday, 02 February 15
SOUTH KOREA'S KOMIPO INVITES BIDS FOR 280K MT OF SUB-BITUMINOUS COAL
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender to buy total 280,000 MT of Sub-bituminous coal coa ...
Sunday, 01 February 15
INDONESIA-TO-INDIA COAL FREIGHT RATES REMAIN WEAK NEXT WEEK
COALspot.com: The BDI continued its fall reached lowest levels since 1986 this week.
The BDI declined 15.55 pct to 608 points on Friday 30, Ja ...
Friday, 30 January 15
CONTANGO AND TANKERS - SKULD
KNOWLEDGE TO ELEVATE
Like an invitation to a dance, the word contango may have some people flustered, but for tanker owners this market phenome ...
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- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Economic Council, Georgia
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Indika Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- The University of Queensland
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
- Electricity Generating Authority of Thailand
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Australian Coal Association
- Leighton Contractors Pty Ltd - Australia
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Bhatia International Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- Kepco SPC Power Corporation, Philippines
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- Indogreen Group - Indonesia
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- Marubeni Corporation - India
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