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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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Friday, 05 April 13
SGX API 8 CFR SOUTH CHINA COAL SWAPS TO GO LIVE
COALspot.com - The Exchange has announced that the SGX API 8 CFR South China Coal Swap will go live for clearing on SGX-DC starting from 29 Ap ...
Thursday, 04 April 13
HANDY:QUIET ; PANAMAX: SLOW START; CAPESIZE: LOW ACTIVITIES - FEARNRESEARCH
Handy
The Atlantic markets remain quiet as charterers and owners waiting to see how it moves. The USG-Feast was at USD 20k and Black Sea-Feast was ...
Wednesday, 03 April 13
HBA HAS LOST US$ 1.53 PER MT IN APRIL 2013
COALspot.com - The Indonesian government’s declared coal bench mark price has lost $1.53 / MT in April 2013.
The monthly coal referen ...
Tuesday, 02 April 13
AUSTRALIA'S NEWCASTLE PORT SHIPPED 633K MT MORE COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 3,029,482 tons of thermal and coking coal for week ended 0700 hours 1 April 2013, Newcas ...
Tuesday, 02 April 13
THE GOVERNORS TO TAKE OVER AUTHORITY OF MINING, FORESTRY AND PLANTATION CONCESSIONS
The Indonesian government is planning to transfer the authority of issuing mining, forestry and plantation concessions from municipalities and distr ...
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- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Metalloyd Limited - United Kingdom
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Xindia Steels Limited - India
- VISA Power Limited - India
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- Ministry of Finance - Indonesia
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Parliament of New Zealand
- Bhushan Steel Limited - India
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Economic Council, Georgia
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Minerals Council of Australia
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- Latin American Coal - Colombia
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Semirara Mining Corp, Philippines
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Rashtriya Ispat Nigam Limited - India
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