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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, 06 January 14
INDONESIAN COAL SWAPS SLIDE TO $ 61.25 FOR Q4' 14 DELIVERY
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery lost $ 0.32 pmt month on month on Friday 3 January 2014. Th ...
Sunday, 05 January 14
API 8 CFR SOUTH CHINA COAL SWAP FOR Q3 DELIVERY CLOSED $ 80.05, A $ 0.90 LOWER THAN Q1 PRICE
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery lost 1.40 percept day on day closed at US$ 80.95 per mt as o ...
Sunday, 05 January 14
CENTRAL BUREAU OF INVESTIGATION OF INDIA REGISTERS CASES IN CONNECTION WITH ALLEGED SUPPLY OF LOW QUALITY INDONESIAN COAL BY A PRIVATE COMPANY TO NTPC & NSPCL
COALspot.com: The Central Bureau of Investigation of India has registered two cases regarding alleged supply of low quality imported Indonesian coal ...
Saturday, 04 January 14
THE INDONESIAN GOVERNMENT TO DOWNSIZE ITS COAL PRODUCTION TARGET TO 400 MMT THIS YEAR
COALspot.com: Indonesia to downsize its coal production target to 400 million tons in 2014, lower than the production in 2013, which stood at 421 mi ...
Friday, 03 January 14
IN 2013 RBCT HAS, FOR THE FIRST TIME, EXPORTED MORE THAN 70 MILLION TONS OF COAL
COALspot.com: South Africa's Richards Bay coal terminal, the world’s largest single coal exporting terminal shipped 6.788 million tonnes of c ...
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- VISA Power Limited - India
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Cement Manufacturers Association - India
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Timah Investasi Mineral - Indoneisa
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Central Electricity Authority - India
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Planning Commission, India
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- Wood Mackenzie - Singapore
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- Indian Energy Exchange, India
- Bhatia International Limited - India
- Attock Cement Pakistan Limited
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- Binh Thuan Hamico - Vietnam
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