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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, 24 February 15
IHS ENERGY COAL CONFERENCE OF THE AMERICAS
Attend the IHS Energy Coal Conference of the Americas 17-19 March in Cartagena, Colombia and learn about timely concerns in today's coal indust ...
Monday, 23 February 15
Q2' CFR SOUTH CHINA COAL SWAP FOR Q2 ROSE 3.39% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 1.90 (+3.39%) per MT month over month and declined US$ 0.08 ...
Monday, 23 February 15
Q2' API 5 FOB NEWCASTLE COAL SWAP CLOSED $1 HIGHER THAN Q3
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 3.12 per MT (+6.44%) month over month and fall US$ 0.43 (-0.83%) w ...
Sunday, 22 February 15
THE BALTIC DRY INDEX LOST ALMOST 3.2% OR 17 POINTS WEEK ON WEEK
COALspot.com: The Baltic Dry Index, one of the economic indicators that monitors the health of the world's economy by tracking the price of shi ...
Friday, 20 February 15
GOVT SET TO INCREASE COAL OUTPUT TARGET THIS YEAR - JAKARTA POST
The Energy and Mineral Resources Ministry is planning to increase its coal output target this year as the government seeks to offset the ongoing de ...
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- Miang Besar Coal Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- MS Steel International - UAE
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Formosa Plastics Group - Taiwan
- Uttam Galva Steels Limited - India
- Coalindo Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- Economic Council, Georgia
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Mercuria Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Heidelberg Cement - Germany
- VISA Power Limited - India
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- The University of Queensland
- Gujarat Sidhee Cement - India
- Ministry of Finance - Indonesia
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Standard Chartered Bank - UAE
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
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