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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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Monday, 09 February 15
Q2' CFR SOUTH CHINA COAL SWAP DECLINED 3.28% TO $ 56.92 W-O-W
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 1.93 (-3.28%) per MT month over month and US$ 0.10 (-0 ...
Sunday, 08 February 15
BDI FELL CONTINUOUSLY HIT A THREE DECADES LOW
COALspot.com: This week Baltic Exchange Dry Freight Index (BDI) fell continuously hit a three decades low.
The BDI continuously fell and was d ...
Friday, 06 February 15
WEEKLY U.S. COAL PRODUCTION UP AN ESTIMATED 1.1% FROM LAST WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 20.1 million short tons (mmst) of coal ...
Friday, 06 February 15
SHIP DAMAGED BY FIRE CAUSED BY PIRATES FOUND TO BE CONSTRUCTIVE TOTAL LOSS - TAYLOR WESSING
KNOWLEDGE TO ELEVATE
The High Court was asked to determine a number of preliminary issues, including whether a vessel was a constructive total ...
Thursday, 05 February 15
BDI HAS NOW FALLEN A LEVEL CLOSE TO THE INDEX'S HISTORIC LOW - INTERMODAL
They say a picture is worth a thousand words and in this instance just one look at the tables above is enough to understand the great pressure the ...
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- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Holcim Trading Pte Ltd - Singapore
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- ASAPP Information Group - India
- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- Planning Commission, India
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Minerals Council of Australia
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- The University of Queensland
- Economic Council, Georgia
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- GMR Energy Limited - India
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
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