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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, 25 June 13
NEWCASTLE PORT SHIPPED OUT MORE COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 3,101,378 tons of coal for the week ended 0700 hours 24 June 2013, Newcastle Port Corp. ...
Monday, 24 June 13
INDONESIA COAL SWAP FOR AUGUST 2013 DELIVERY GAINS WEEK ON WEEK
COALspot.com – Coal prices for immediate supply contracts have started moving up, but prices for next year supply shows a negative trend ...
Sunday, 23 June 13
BDI CROSSED ITS PSYCHOLOGICAL BARRIER THIS WEEK - VISTAAR
COALspot.com : The BDI crossed the psychological barrier of 1000 points after many months and closed at 1,027 points, which were up by 14.11 pct wee ...
Sunday, 23 June 13
SHIP PRICES NOT FOLLOWING FREIGHT MARKET FUNDAMENTALS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Although it's been the case in many occasions in the past, it appears that ship prices haven't been quite following freight market fundamentals, i ...
Friday, 21 June 13
U.S. COAL PRODUCTION INCREASED WEEK ON WEEK, EIA SAYS
COALspot.com – United states the world’s second largest coal producer produced totalled approximately 19.70 million short tons (mmst) of ...
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- Wilmar Investment Holdings
- India Bulls Power Limited - India
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- The Treasury - Australian Government
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- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
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- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
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- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Planning Commission, India
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- Bhoruka Overseas - Indonesia
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Parliament of New Zealand
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- Eastern Energy - Thailand
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- Bhatia International Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- White Energy Company Limited
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement - Thailand
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Trasteel International SA, Italy
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
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