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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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Sunday, 13 October 13
API 8 CFR SOUTH CHINA COAL - AVERAGE Q4 2013 DELIVERY FELL 0.30 PERCEPT ON WEEK
COALspot.com : API 8 CFR South China Coal swaps for average Q4 2013 delivery fell 0.30 percept week on week on Friday 11 October 2013. The CFR South ...
Saturday, 12 October 13
PANAMAX: OWNERS ARE AT US$ 17-18.5K PER DAY; CHARTERERS ARE AT US$ 15.5-16K - CAPT. REDDY
COALspot.com - The futures market was heavily down on the cape size vessels and the physical average charterer rates on cape size vessels dropped by ...
Friday, 11 October 13
DRY BULK FREIGHT RATE POSITIVE MOMENTUM TO BE SUPPORTED BY HIGHER DEMAND SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
BIMCO released its latest short term research on the shipping markets, estimating that the elevated level of Capesize TC average rates i ...
Friday, 11 October 13
US COAL PRODUCTION FALLS 7.70% IN SEPTEMBER
COALspot.com – United States the world’s second largest coal producer produced approximately 17.70 million short tons (mmst) of coal in ...
Thursday, 10 October 13
NPC AUSTRALIA SHIPPED 2.99 MILLION TONS OF COAL W-O-W
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 12.04 per cent week on week to 2.99 million mt for ...
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- GAC Shipping (India) Pvt Ltd
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- South Luzon Thermal Energy Corporation
- Parry Sugars Refinery, India
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Romanian Commodities Exchange
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
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- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Uttam Galva Steels Limited - India
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- White Energy Company Limited
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Wilmar Investment Holdings
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- The University of Queensland
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- Bhatia International Limited - India
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