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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, 10 February 17
U.S. COAL OUTPUT IS ESTIMATED TO HAVE DECLINED BY 158 MMST IN 2016 TO 739 MMST, SAYS EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 17 million short tons ...
Wednesday, 08 February 17
MARKET INSIGHT - PANOS MAKRINOS
The challenges the oil market has witnessed since the end of 2014 has resulted in a crisis for the global offshore oil and gas exploration industry ...
Tuesday, 07 February 17
WE ARE STILL RIDING ON A WAVE OF MARKET IMPROVEMENT, WITH THE GLOBAL TRADE OF MOST COMMODITIES STILL SHOWING SIGNS OF IMPROVING GROWTH - GEORGE LAZARIDIS
The end of 2016 came with a rejuvenated sentiment amongst most traders and investors, in part through the sigh of relief that 2016 was finally comi ...
Monday, 06 February 17
AFTER MONTHS OF GAINS, THE INDONESIAN GOVERNMENT DECLARED MONTHLY COAL BENCHMARK PRICE IS STEADILY DROPPING
COALspot.com: Over the past two months, the HBA of Indonesian thermal coal has dropped around 18.06 percent. It sank to $ 83.32 per ton for Februar ...
Monday, 06 February 17
THE FREIGHT MARKET CONTINUED ITS DOWNFALL IN ALL SEGMENTS
COALspot.com: Due to Lunar year holidays and celebration, the Freight market was declined in all segments week ending 27 January. The fall was cont ...
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- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- Wilmar Investment Holdings
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Siam City Cement PLC, Thailand
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Renaissance Capital - South Africa
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- The University of Queensland
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Sarangani Energy Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
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