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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, 29 November 16
US WEEKLY COAL OUTPUT TOTALS 17.2 MMST, UP 2.8% : EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 17.2 million short ton ...
Monday, 28 November 16
BALTIC DRY INDEX FALLS TO 1181 POINT, DOWN 76 POINTS W/W
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities down slightly and ending in a negative note this past wee ...
Thursday, 24 November 16
SUPRAMAX: SOUTH AFRICA STILL STRONG WITH OWNERS ACHIEVING AROUND USD 14-15K FOR TRIPS EAST - FEARNLEYS
Supramax
A positive kick-off in both the Atlantic and the Pacific. Very healthy rates within USG, some supras receiving well over 20k for trips t ...
Wednesday, 23 November 16
MARKET INSIGHT - CHRISTOPHER THOMAS WHITTY
The Organization of the Petroleum Exporting Countries (OPEC) is due to finalize a reduction in total production at its next scheduled meeting in Vi ...
Tuesday, 22 November 16
ITALY'S STEAM COAL IMPORTS EXPECTED TO DECLINE 7% Y/Y TO 15 MILLION TONS IN 2017 - ITALIAN COAL ASSOCIATION
Italy’s steam coal imports expected to decline to 15 million tons in 2017, or 7% less imports compared to 2016. The coking coal imports are e ...
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- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Planning Commission, India
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- White Energy Company Limited
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- GMR Energy Limited - India
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- Interocean Group of Companies - India
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Wood Mackenzie - Singapore
- Latin American Coal - Colombia
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Bayan Resources Tbk. - Indonesia
- Mercator Lines Limited - India
- Makarim & Taira - Indonesia
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Power Finance Corporation Ltd., India
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
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