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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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Saturday, 23 March 13
WORLD COAL TRADE FIRST PASSES 1 BILLION TONS IN 2012 - VEREIN DER KOHLENIMPORTEURE E.V
Press Release: Hard coal imports to Germany on the previous year's level in spite of regenerative energies. Imports for power plants at an all-time ...
Thursday, 21 March 13
HANDY : RBCT ROUNDS FIXED AT $ 9000 + 300K BB - FEARNRESEARCH
Handy
The Atlantic market remains firm with cargoes seen to support healthy rates as per last week. The USG-Feast was at USD 25k and Black Sea-Feas ...
Wednesday, 20 March 13
NTPC TO IMPORT SEVEN MILLION TONS COAL FOR FOUR MONTHS
COALspot.com : NTPC Limited (formerly National Thermal Power Corporation) is the largest Indian state-owned electric utilities company has awarded&n ...
Tuesday, 19 March 13
CHINA GAS PRICE REFORMS AND APAC GAS PRICING - FITCH STREET VIEW
Fitch Ratings says pricing reform in the Chinese gas sector is unlikely to materially impact gas distributors' margins, and low gas prices in the U ...
Tuesday, 19 March 13
NEWCASTLE COAL EXPORTS FALL BY 4.27 PERCENT ON WEEK
COALspot.com - Newcastle port in Australia has loaded 2,365,561 MT of thermal and coking coal for week ended 0700 hours 18 March 2013, Newcast ...
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- Mercator Lines Limited - India
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- White Energy Company Limited
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Trasteel International SA, Italy
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- Xindia Steels Limited - India
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- The University of Queensland
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
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