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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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Monday, 10 February 14
Q1 2015, API 8 CFR SOUTH CHINA COAL SWAP CLOSED AROUND $ 2 HIGHER THAN Q2 14 PRICE
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 delivery lost 2.61 percent month on month and closed at US$ 77.28 per mt as on Frid ...
Monday, 10 February 14
SUPRAMAX STILL AT AROUND US$ 5K + BB 50K DELIVERY KALIMANTAN FOR A TRIP TO INDIA - CAPT. REDDY
COALspot.com: The BDI was down by 1.71 pct and closed at 1091 points week ended 7 February 2014. The BDI seemed to reach the bottom as the cape inde ...
Saturday, 08 February 14
U.S PRODUCED 84.5 MMMST OF COAL IN JANUARY; 2.05% UP MONTH ON MONTH, EIA SAYS
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.8 million short tons (mmst) of coal in ...
Friday, 07 February 14
DRY BULK MARKET ON ' REVERSE' MODE DUE TO CHINESE HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept its uninspiring mood throughout yet another week, with the Baltic Dry Index (BDI) hovering slightly above the 1,000-poi ...
Thursday, 06 February 14
INDONESIA'S BAN ON THE EXPORT OF RAW MINERAL ORES COMES INTO FORCE - INCE & CO
COALspot.com: On 12 January 2014, the ban on the export of unprocessed mineral ores came into effect in Indonesia. This ban enforces the Mining Law ...
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- Interocean Group of Companies - India
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- IEA Clean Coal Centre - UK
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- SN Aboitiz Power Inc, Philippines
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Posco Energy - South Korea
- Indian Energy Exchange, India
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Power Finance Corporation Ltd., India
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- Planning Commission, India
- Bhushan Steel Limited - India
- Australian Coal Association
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Port Waratah Coal Services - Australia
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Malabar Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
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