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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, 21 January 14
PORT OF NEWCASTLE SHIPPED SLIGHTLY MORE COAL WEEK ON WEEK
COALspot.com: In the week ended 20 January 14, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 2. ...
Monday, 20 January 14
SUB-BIT INDONESIA COAL SWAP SEEN LOWER IN 2ND HALF OF 2014
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery lost $ 0.78 pmt month on month on Friday 17 January 2014. T ...
Monday, 20 January 14
THE CFR SOUTH CHINA COAL MARKET APPEARS TO HAVE LOST DIRECTION
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery lost 4.25 percept month on month and closed at US$ 79.48 per mt as ...
Sunday, 19 January 14
FREIGHT MARKETS SEE CONTINUED WEAK PERFORMANCE
COALspot.com: The market has continued to soften particularly in the far East/SE Asia sector.
The BDI was down 6 pct week on week, the index was ...
Friday, 17 January 14
US COAL PRODUCTION DOWN WEEK ON WEEK: EIA
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.3 million short tons (mmst) of co ...
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- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Parliament of New Zealand
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- Posco Energy - South Korea
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- The University of Queensland
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Bhatia International Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Planning Commission, India
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Tata Chemicals Ltd - India
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Straits Asia Resources Limited - Singapore
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