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