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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, 31 July 15
CAPE'S PAPER MARKET REMAINS FIRM - INTERMODAL
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Wednesday, 29 July 15
Q1'16 FOB INDONESIA COAL SWAP CLOSED HIGHER THAN Q3'15
COALspot.com: Indonesian coal swap for delivery Q3 2015 declined month on month and gains week over week, this past week.
The Q3 swap was decl ...
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- The University of Queensland
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- Minerals Council of Australia
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Medco Energi Mining Internasional
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Australian Coal Association
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- IEA Clean Coal Centre - UK
- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Australian Commodity Traders Exchange
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- Energy Development Corp, Philippines
- PTC India Limited - India
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Coalindo Energy - Indonesia
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- ASAPP Information Group - India
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
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