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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, 07 May 13
NEWCASTLE PORT'S COAL EXPORTS HOLD STEADY WEEK ON WEEK
COALspot.com - Newcastle port in Australia has loaded 2,975,160 tons of thermal and coking coal for week ended 0700 hours 6 May 2013, Newcastl ...
Monday, 06 May 13
INDONESIAN COAL PRICE REFERENCE FALLS CONTINUE
COALspot.com - The Indonesian government’s declared coal bench mark price has lost $ 3.23 / MT in May 2013.
The monthly coal pr ...
Sunday, 05 May 13
SUB-BIT FOB INDONESIA COAL - MIXED TREND; API 8 CFR SOUTH CHINA COAL - POSITIVE TREND
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average June 2013 delivery has gained 0.28 percent and API 8 CFR South China Coal shipment&nb ...
Saturday, 04 May 13
INDONESIA TO INDIA PANAMAX FREIGHT : FLAT TO SOFT - CAPT. REDDY
COALspot.com - The demand for iron ore picked up and its pushed up the cape size index by 7.86 pct. Cape index closed at 1,344 points. The BDI ...
Friday, 03 May 13
US PRODUCED 17.9 MILLION SHORT TONS (MMST) OF COAL IN A WEEK
COALspot.com - U.S. produced totaled approximately 17.9 million short tons (mmst) in a week (For the week ended April 27, 2013), EIA said in its lat ...
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- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Jindal Steel & Power Ltd - India
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Rio Tinto Coal - Australia
- The University of Queensland
- Xindia Steels Limited - India
- Planning Commission, India
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Medco Energi Mining Internasional
- Australian Coal Association
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- ASAPP Information Group - India
- Central Electricity Authority - India
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- PTC India Limited - India
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Energy Development Corp, Philippines
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Antam Resourcindo - Indonesia
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- White Energy Company Limited
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Metalloyd Limited - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Larsen & Toubro Limited - India
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
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