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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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Tuesday, 20 January 15
INDIA TO SURPASS THE UNITED STATES AND BECOME THE SECOND-LARGEST COAL CONSUMER IN THE WORLD BY 2019 - IMF
COALspot.com: In 2013, coal added more primary energy than any other fuel and was the fastest-growing fossil fuel, enhancing its position as the se ...
Tuesday, 20 January 15
INDONESIAN COAL OUTPUT SEEN RISING, DESPITE FALL IN ITS PRICE
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 declined month on month and week over week, but Indonesian Coal Output Seen Rising. T ...
Tuesday, 20 January 15
NEWCASTLE COAL SWAP FOR Q1' 2015 DELIVERY DECLINED 2.83% M-O-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery declined US$ 1.45 per MT (-2.83%) month over month and US$ 0.50 (-0.99%) we ...
Monday, 19 January 15
HBA FALL TO FRESH LOWS; COAL OVERSUPPLY WILL CONTINUE TO PUSH PRICE DOWN
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down Indonesian coal bench mark price this month to US$ 63.84. T ...
Monday, 19 January 15
CFR SOUTH CHINA COAL SWAPS REMAIN WEAK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery declined US$ 3.37 (-5.63%) per MT month over month and US$ 0.74 (-1.29%) ...
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- Power Finance Corporation Ltd., India
- Pendopo Energi Batubara - Indonesia
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- Tamil Nadu electricity Board
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Mjunction Services Limited - India
- PTC India Limited - India
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Jindal Steel & Power Ltd - India
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining and Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Manunggal Multi Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
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