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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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Wednesday, 08 January 14
SHIPPING: THE ABSOLUTE BOTTOM OF THE CYCLE WAS REACHED AND PASSED - GEORGE LAZARIDIS
COALspot.com: To many in the industry 2013 has been the turning point in the market where the absolute bottom of the cycle was reached and passed.
...
Tuesday, 07 January 14
INDONESIA RAISES COAL PRICE THIS MONTH
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has increased government declared coal bench mark price by US$ 1.59 / MT ...
Tuesday, 07 January 14
NEWCASTLE COAL TERMINAL'S COAL EXPORTS SLIDE TO 3.54 MMT W/E 30 DECEMBER 13
COALspot.com: In the week ended December 30, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.54 ...
Tuesday, 07 January 14
US COAL OUTPUT SLIDES 9 PCT WEEK ON WEEK, EIA SAYS
COALspot.com – United States the world’s second largest coal producer, produced approximately 17.8 million short tons (mmst) of coal in ...
Monday, 06 January 14
ARGUS LAUNCHES SPOT CFR EAST COAST INDIA COAL ASSESSMENTS
COALspot.com: Global energy and commodity news and price reporting agency Argus has announced today that, the company has launched CFR coal assessme ...
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- Deloitte Consulting - India
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Tata Chemicals Ltd - India
- Coastal Gujarat Power Limited - India
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- White Energy Company Limited
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- ICICI Bank Limited - India
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Baramulti Group, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
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