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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, 13 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS JUMP 30.61 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 30.61 per cent week on week to 2.95 million mt for ...
Monday, 12 August 13
GBCE SUCCESSFUL IN UPGRADING LOW RANK INDONESIAN COAL ON INDUSTRIAL SCALE
COALspot.com : GB Clean Energy Ltd. (GBCE) has annoused that, the company has successfully upgraded 2,426 tonnes of low rank 4,018 kcal NAR Ind ...
Monday, 12 August 13
INDIA - SAFE SHIPMENT OF IRON ORE FINES FROM INDIAN PORTS - WEST OF ENGLAND P&I CLUB
As Members may be aware, in 2009 two ships, the ‘Asian Forest’ and the ‘Black Rose’, capsized and sank following the liquefa ...
Sunday, 11 August 13
INDONESIAN COAL SWAPS : FLAT ON DAY
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery flat on day due to holidays in Indonesia, Malaysia & ...
Sunday, 11 August 13
SUPRAMAX FREIGHT RATES FROM INDONESIA TO INDIA CONTINUED TO BE SOFT - VISTAAR
COALspot.com : The freight market was soft this week with all indices down , the reason could be long weekend holidays in Indonesia, Singapore and M ...
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- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Star Paper Mills Limited - India
- Australian Coal Association
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- Energy Development Corp, Philippines
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- Commonwealth Bank - Australia
- Toyota Tsusho Corporation, Japan
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Borneo Indobara - Indonesia
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Bharathi Cement Corporation - India
- Dalmia Cement Bharat India
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- The University of Queensland
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
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