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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, 27 November 12
NEWCASTLE PORT HAS SHIPPED 1.79 MILLION TONS OF COAL W/E 26 NOVEMBER
COALspot.com - Newcastle port in Australia has loaded 1,793,841 MT of thermal and coking coal for week ended 0700 hours 26 November 2012, Newc ...
Sunday, 25 November 12
INDONESIA TO INDIA SUPRAMAX FREIGHT RATES ARE EXPECTED TO BE FIRM - VISTAAR
COALspot.com - The freight market was buoyant this week with all sectors up except for the Cape size index. The BDI was up by 5.21 pct closing at 10 ...
Sunday, 25 November 12
INDONESIAN SUB BITUMINOUS COAL SWAP CONTRACTS SLIDE
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for February 2013 delivery lost 0.76percent WoW but gained 0.16 percent DoD on Friday ...
Saturday, 24 November 12
DELTA DUNIA MAKMUR PRODUCES 3.2 MILLION TONS OF COAL IN OCTOBER
COALspot.com - PT Delta Dunia Makmur Tbk., has removed 31.1 million bcm* (-4.0% YoY) of Overburden in October 2012 totaled while coal production was ...
Friday, 23 November 12
CHOOSING THE RIGHT TIME TO INVEST IN NEW VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Shipping is all about timing, a process often rising to the height of artform, as ship owners are having to pick the exact moment of selling most of ...
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- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Eastern Energy - Thailand
- Oldendorff Carriers - Singapore
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Mintek Dendrill Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Energy Link Ltd, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Thiess Contractors Indonesia
- ICICI Bank Limited - India
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- MS Steel International - UAE
- Central Electricity Authority - India
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
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