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