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