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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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Wednesday, 06 March 19
KOSPO INVITES BIDS FOR 80,000 MT OF 3800 NCV COAL FOR 21 - 30 MARCH, 2019 LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 80,000 MT of min 3,800 kcal/kg NCV low calor ...
Wednesday, 06 March 19
KOREA SOUTHERN POWER CO INVITES BIDS FOR 980,000 MT OF 4600 NCV COAL FOR THREE YEARS
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 4,600 kcal/kg NCV low calo ...
Wednesday, 06 March 19
SHIPPING MARKET INSIGHT - INERMODAL
In a downward moving market, softer SnP activity is usually a given, as the gap between Sellers’ and Buyers’ ideas widens, especially w ...
Saturday, 02 March 19
A 60,500-TONNER WAS BOOKED DELIVERY SINGAPORE, VIA INDONESIA, REDELIVERY WEST COAST INDIA, AT $11,250 - BALTIC BRIEFING
Capesize
Vale’s ongoing absence from the Brazil spot market continued to have a negative impact on sentiment, with rates falling in all a ...
Thursday, 28 February 19
COAL'S PERFECT STORM HITS $70 BILLION AUSTRALIAN PROJECTS - BLOOMBERG
It’s been a tough few weeks for our coal industry.
First there was a court ruling blocking a new mine on climate change ground ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sindya Power Generating Company Private Ltd
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercuria Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- Meenaskhi Energy Private Limited - India
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- The University of Queensland
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- White Energy Company Limited
- Siam City Cement - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Trasteel International SA, Italy
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Thai Mozambique Logistica
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Africa Commodities Group - South Africa
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- Meralco Power Generation, Philippines
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
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