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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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Sunday, 23 November 14
ITALY'S STEAM COAL IMPORTS TO DROP BY 11% IN 2014 - ASSOCARBONI
COALspot.com: Italy’s steam coal imports expected to drop to 16 million tons in 2014 (-11% compared to 2013); coking coal imports to plunge t ...
Saturday, 22 November 14
THE FALL IN BUNKER PRICES REDUCE FUEL COSTS SIGNIFICANTLY - BIMCO, PETER SAND
For a ship that burns 24 tonnes of fuel per day while steaming, fuel costs are reduced by as much as USD 1 million a year if current price level st ...
Saturday, 22 November 14
DRY BULKERS NEWBUILDING DELIVERIES REACHED 11.8 MILLION DWT DURING THIRD QUARTER, NET FLEET GROWTH FOR 2014 TO REACH 5% - HELLENIC SHIPPING NEWS
The dry bulk market has rebounded since its less than impressive performance since the start of the year, but overall, third quarter figures could ...
Friday, 21 November 14
BUMI ENTERS INTO CONDITIONAL SALE & PURCHASE AGREEMENT TO SELL FBS STAKE
COALspot.com: PT Bumi Resources Tbk, one of the Indonesia's largest coal producers confirms that it has executed a Conditional Sale and Purchas ...
Friday, 21 November 14
U.S LAST WEEK'S COAL PRODUCTION STAYS FLAT W-O-W
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.9 million short tons (mmst) of coal ...
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- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Indonesian Coal Mining Association
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- India Bulls Power Limited - India
- PTC India Limited - India
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Indian Oil Corporation Limited
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Borneo Indobara - Indonesia
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- Indo Tambangraya Megah - Indonesia
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- Kapuas Tunggal Persada - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- The University of Queensland
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
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