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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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Friday, 30 May 14
US COAL PRODUCTION RELATIVELY FLAT WEEK ON WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 18.6 million short tons (mmst) of coal in a ...
Thursday, 29 May 14
PEABODY ENERGY CHAIRMAN RECEIVES WCA AWARD
The World Coal Association has presented Gregory H. Boyce, Chairman and Chief Executive Officer of Peabody Energy (NYSE: BTU), with the 2014 Chairm ...
Thursday, 29 May 14
HANDY : THE SUPRAS ARE BEING TRADED AROUND 13K FOR SHORTER UPTO 1 YEAR PERIOD
Handy
The week started off with bank holidays in London and very little happening. This trend has continued and we believe it will continue into ...
Wednesday, 28 May 14
THE DRY BULK MARKET REMAINED UNDER PRESSURE - INTERMODAL
COALspot.com: The Dry Bulk market remained under pressure during this past week, with all indices pointing down compared to the previous Friday. Th ...
Tuesday, 27 May 14
PORT OF NEWCASTLE SHIPPED 19.13% LESS COAL THIS PAST WEEK
COALspot.com: In the week ended 07:00 hours 26 May 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, ...
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- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- Vedanta Resources Plc - India
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- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
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- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Deloitte Consulting - India
- The University of Queensland
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Trasteel International SA, Italy
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Altura Mining Limited, Indonesia
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- Xindia Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Commonwealth Bank - Australia
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Larsen & Toubro Limited - India
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
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