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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, 03 March 15
INDIAN THERMAL COAL IMPORTS: STEAMING FORWARD - CLARKSONS
Coal-fired power stations comprise around 60% of India’s power output, and with domestic supply issues and favourable international coal pric ...
Tuesday, 03 March 15
Q4' FOB INDONESIA COAL SWAP CLOSED 2% LOWER COMPARED TO Q2 CLOSING PRICE OF $ 47.47
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose month on month and declined week over week.
The Q2 swap increased US$ 2.24 ...
Tuesday, 03 March 15
FOB RICHARDS BAY COAL SWAPS: Q2 UP 9.60%; Q3 UP 9.75% W-O-W
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month and week on week.
The Q2 swap has soared US$ 5 ...
Monday, 02 March 15
CFR SOUTH CHINA COAL SWAP FOR Q2 DELIVERY REACHED $ 57.50 PMT W/E 27 FEB 2015
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 1.37 (+2.44%) per MT month over month and declined US$ 0.42 ...
Monday, 02 March 15
BORYEONG POWER PLANT OF KOMIPO TO IMPORT 140K OF SUB-BITUMINOUS COAL FOR Q2
COALspot.com - Korea Midland Power Co. Ltd. (KOMIPO) is inviting bids from coal producers, marketing companies, or traders to supply of 140,000 (70 ...
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- Global Business Power Corporation, Philippines
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- The Treasury - Australian Government
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- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
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- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Sakthi Sugars Limited - India
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Electricity Authority, New Zealand
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- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- VISA Power Limited - India
- CNBM International Corporation - China
- Coalindo Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
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- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Alfred C Toepfer International GmbH - Germany
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Metalloyd Limited - United Kingdom
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Dalmia Cement Bharat India
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Bhatia International Limited - India
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
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- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- PTC India Limited - India
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Interocean Group of Companies - India
- Edison Trading Spa - Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- GMR Energy Limited - India
- Ministry of Mines - Canada
- Xindia Steels Limited - India
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