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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, 26 March 13
NEWCASTLE PORT SHIPPED 2.39 MMT OF COAL W/E 25 MARCH 2013
COALspot.com - Newcastle port in Australia has loaded 2.396 million tons of thermal and coking coal for week ended 0700 hours 25 March 2013, N ...
Monday, 25 March 13
BUNKER FUELS ARE ABOUT TO GET CLEANER, BUT AT WHAT COST? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The cost of bunkers is nowadays the driving force behind most ship owners' major decisions, with regulations bound to change in many parts of the w ...
Sunday, 24 March 13
THE SUB-BIT INDONESIA'S COAL SWAPS FOR Q2 DELIVERY PRICE LOST 7.47 PERCENT PMT M-O-M
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has lost 3.39 percent and CFR South China coal shipment 2.65 ...
Sunday, 24 March 13
FREIGHT MARKETS CONTINUED TO FIRM - VISTAAR
COALspot.com - This freight market continued to remain firm in all segments except for cape index which softened slightly.
The BDI was up by 4.60 ...
Sunday, 24 March 13
DRY BULK MARKET PROSPECTS OFFER ROOM FOR RESTRAINED OPTIMISM SAYS SHIP OWNER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In its announcement regarding its annual performance, ship owner Frontline offered some useful insight on the future prospects of both the dry bulk ...
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- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- Bangladesh Power Developement Board
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Binh Thuan Hamico - Vietnam
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Australian Commodity Traders Exchange
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- Larsen & Toubro Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Sinarmas Energy and Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- The University of Queensland
- ICICI Bank Limited - India
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Aditya Birla Group - India
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- CNBM International Corporation - China
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Interocean Group of Companies - India
- Ind-Barath Power Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
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