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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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Saturday, 03 January 15
U.S WEEKLY COAL PRODUCTION FELL 11.2% TO 17.6 MMST WEEK OVER WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.6 million short tons (mmst) of coal ...
Thursday, 01 January 15
FOB RICHARDS BAY COAL SWAPS CLOSED AT $63.47 PMT ON 26 DEC, SGX DATA SHOWS
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 3.37 (-4. ...
Wednesday, 31 December 14
COASTAL ENERGEN (C&O) COMMENCES 1ST UNIT OF 1200 MW POWER PLANT IN INDIA
COALspot.com: Coastal Energen, part of the Coal & Oil Group, announced last week the commissioning and commencement of power production at the ...
Wednesday, 31 December 14
SUB-BIT INDONESIA COAL Q2' 15 DELIVERY SWAP CLOSED 1.03% LOWER COMPARED TO AVERAGE Q1' 15 DELIVERY PRICE - SGX
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month and gained week over week.
The Q1 swap has lost US$ 1.35 (-2 ...
Tuesday, 30 December 14
SHIP PRICES KEEP ON FALLING, SALES COME EARLY FOR SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship prices keep on falling on the back of low freight rates. According to the latest report from shipbroker Allied Shipbroking, January sales seem ...
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- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- Ministry of Transport, Egypt
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Planning Commission, India
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Star Paper Mills Limited - India
- PTC India Limited - India
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- Economic Council, Georgia
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
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