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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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- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Planning Commission, India
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Global Business Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Sindya Power Generating Company Private Ltd
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- Sojitz Corporation - Japan
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Minerals Council of Australia
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Orica Mining Services - Indonesia
- Marubeni Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Mercator Lines Limited - India
- Anglo American - United Kingdom
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
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