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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, 27 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS JUMPED 15.59 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 15.59 per cent week on week to 2.76 million mt for ...
Monday, 26 August 13
CARRIAGE OF COAL CARGOES FROM KALIMANTAN, INDONESIA - WEST OF ENGLAND P&I CLUB
The Club has recently been advised by consulting scientists and engineers Dr J H Burgoyne and Partners (International) Limited that the number of in ...
Sunday, 25 August 13
API 8 CFR SOUTH CHINA COAL: HEADING TO NORTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery US$ 2.39 up month on month. The swap was moved positive ...
Sunday, 25 August 13
THE FREIGHT MARKET S7 & S8 SECTOR IS EXPECTED TO BE STEADY/FIRM NEXT WEEK - VISTAAR
COALspot.com - The freight market continued to be firm with all indices moved positive except for Panamax which was slightly down (2 pct down).
T ...
Friday, 23 August 13
US PRODUCED MORE COAL WEEK ON WEEK - EIA
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.80 million short tons (mmst) of ...
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- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
- Grasim Industreis Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Barasentosa Lestari - Indonesia
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- The University of Queensland
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- PTC India Limited - India
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
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