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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, 29 April 14
Q4 SUB-BIT INDONESIA COAL SWAP CLOSED US$ 1.07 HIGHER COMPARED TO Q2 DELIVERY PRICE
COALspot.com: Indonesian coal swaps for average Q2’ 2014 gain on month and on week according to AsiaClear OTC coal swap's reports rele ...
Tuesday, 29 April 14
NEWCASTLE SHIPPED 3.03 MILLION TONS WEEK ON WEEK
COALspot.com: In the week ended 07:00 hours 28 April 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensl ...
Tuesday, 29 April 14
Q2 API 8 CFR SOUTH CHINA COAL SWAP LOST 0.29% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries lost 0.29 percent month on month and closed at US$ 75.43 per mt as o ...
Monday, 28 April 14
CHINA LIKELY TO FALL SHORT OF NUCLEAR POWER TARGETS AT 175GW OF CAPACITY BY 2030 - WOOD MACKENZIE
Coal will remain dominant supply at 64% of power mix
Wood Mackenzie forecasts that China will not meet its environmentally-driven, government ...
Sunday, 27 April 14
INDONESIA TO INDIA FREIGHT RATES ARE EXPECTED TO BE STEADY NEXT WEEK
COALspot.com: The freight market seems to have bottomed out and saw some marginal gains in all segments, said Capt. Reddy of Vistaar Shipping In ...
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Coalindo Energy - Indonesia
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- India Bulls Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- ASAPP Information Group - India
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- IEA Clean Coal Centre - UK
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Rio Tinto Coal - Australia
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- The University of Queensland
- Parliament of New Zealand
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Orica Australia Pty. Ltd.
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Economic Council, Georgia
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Ceylon Electricity Board - Sri Lanka
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- Latin American Coal - Colombia
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
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