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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, 04 November 14
INDONESIAN COAL SWAPS FOR 2015 DELIVERIES SHOW A WEAK TREND
COALspot.com: Indonesian coal swaps for delivery Q4' 2014 lost month on month and gained day on day and week on week, the trend was same as las ...
Tuesday, 04 November 14
FOB NEWCASTLE COAL SWAPS GAINED WEEK OVER WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2014 delivery decreased US$ 1.09 (-1.99%) month over month and increased US$ 0.31 (+0.58% ...
Monday, 03 November 14
ADARO PRODUCED 41.90MT OF COAL FOR FIRST 9 MONTHS OF 2014
COALspot.com: Adaro’s coal production in the third quarter reached 14.03 Mt, a 2% increase compared to the same period of last year. Accordin ...
Monday, 03 November 14
CFR SOUTH CHINA COAL SWAP FOR Q4' 2014 DELIVERY LOST 2.80% MONTH OVER MONTH
COALspot.com: API 8 CFR South China Coal swap for Q4’ 2014 delivery has decreased US$ 1.86 (-2.80%) month over month and increased US$ 0.37 ( ...
Monday, 03 November 14
INDONESIAN'S COAL EXPORTS JUMP IN SEPTEMBER
COALspot.com: Indonesia, one of the world's largest coal producers and the global leading multi grade coal exporter shipped around $1.50 ...
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- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- The University of Queensland
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- Larsen & Toubro Limited - India
- Australian Coal Association
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Bharathi Cement Corporation - India
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
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