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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, 01 June 16
INDIA'S COAL IMPORTS IN APRIL 2016 DECLINED 15% Y/Y; COAL INDIA INCREASED COAL PRICES BY 6.2%
Coal India has approved raising weighted average coal prices by 6.2 per cent over the current price for both regulated and non-regulated sectors.
...
Wednesday, 01 June 16
ZERO SUPPLY TO FUEL GROWTH IN THE DRY BULK MARKET SAYS BIMCO PRESIDENT
The dry bulk market could become profitable again in 2019 – but only if a series of extremely tough and sustained measures are taken by shipo ...
Wednesday, 01 June 16
MARKET INSIGHT - LINOS KOGEVINAS
In another page from this year’s oil drama, oil has, after a series of gains, rebounded to ~$50 / barrel and immediately stopped climbing. &n ...
Tuesday, 31 May 16
CS50 INDONESIA COAL INDEX UP 0.28% COMPARED WITH A WEEK AGO
COALspot.com: Average 5000 GAR coal index of Indonesian origin was up 0.28 percent week over week to averaging $39.01 per ton this past week, shows ...
Monday, 30 May 16
BORYEONG POWER PLANT TO IMPORT HALF A MILLION TONS OF BITUMINOUS COAL
COALspot.com: South Korea’s state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 500,000 Metric Tons of Bituminous Coal T ...
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- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- The University of Queensland
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Binh Thuan Hamico - Vietnam
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- White Energy Company Limited
- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- Xindia Steels Limited - India
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Singapore Mercantile Exchange
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Minerals Council of Australia
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- London Commodity Brokers - England
- Marubeni Corporation - India
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
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