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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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- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- The University of Queensland
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Meralco Power Generation, Philippines
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Alfred C Toepfer International GmbH - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Planning Commission, India
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Mjunction Services Limited - India
- Indika Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- McConnell Dowell - Australia
- Bhushan Steel Limited - India
- Dalmia Cement Bharat India
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Oldendorff Carriers - Singapore
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Marubeni Corporation - India
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