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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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Thursday, 28 January 16
WHAT ARE THE PROSPECTS FOR COAL IN LIGHT OF THE PARIS CLIMATE AGREEMENT? - GERMAN COAL IMPORTERS ASSOCIATION
This depends – says the VDKi – to a very great extent on who you want to believe more, the United Nations or the International Energy A ...
Thursday, 28 January 16
RICHARDS BAY COAL SWAPS FOR Q1,Q2 AND Q3 DELIVERIES FIRM THIS PAST WEEK
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap rose month over month and week over week.
The Q1’ 2016 FOB Richards Bay Coa ...
Wednesday, 27 January 16
API 5 FOB NEWCASTLE COAL SWAPS CLOSE MIXED
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery rose another $1.17 per ton (3.13%) this past week compared to the sam ...
Wednesday, 27 January 16
CHINA'S STALLING ECONOMY HAS HAD A GREAT EFFECT ON VARIOUS COMMODITIES; DECREASED DEMAND DRIVING COMMODITY PRICES LOWER AND LOWER - LINOS ALEXANDROS KOGEVINAS
Having gone through the first few weeks of 2016, it’s starting to look like another challenging year is ahead of us. Hopes for a recovery in ...
Wednesday, 27 January 16
WORLD HARD COAL PRODUCTION AND CONSUMPTION DECLINE IN 2015 FOR THE FIRST TIME IN OVER A DECADE - VDKI
COALspot.com: Seaborne hard coal trade and the changes in this area were decisively affected by China and India - VDKi.
China bears the g ...
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- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Edison Trading Spa - Italy
- Global Coal Blending Company Limited - Australia
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Thai Mozambique Logistica
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Siam City Cement - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Carbofer General Trading SA - India
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- Planning Commission, India
- VISA Power Limited - India
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- Cement Manufacturers Association - India
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- White Energy Company Limited
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- The University of Queensland
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
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