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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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Saturday, 03 January 15
U.S WEEKLY COAL PRODUCTION FELL 11.2% TO 17.6 MMST WEEK OVER WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.6 million short tons (mmst) of coal ...
Thursday, 01 January 15
FOB RICHARDS BAY COAL SWAPS CLOSED AT $63.47 PMT ON 26 DEC, SGX DATA SHOWS
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 3.37 (-4. ...
Wednesday, 31 December 14
COASTAL ENERGEN (C&O) COMMENCES 1ST UNIT OF 1200 MW POWER PLANT IN INDIA
COALspot.com: Coastal Energen, part of the Coal & Oil Group, announced last week the commissioning and commencement of power production at the ...
Wednesday, 31 December 14
SUB-BIT INDONESIA COAL Q2' 15 DELIVERY SWAP CLOSED 1.03% LOWER COMPARED TO AVERAGE Q1' 15 DELIVERY PRICE - SGX
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month and gained week over week.
The Q1 swap has lost US$ 1.35 (-2 ...
Tuesday, 30 December 14
SHIP PRICES KEEP ON FALLING, SALES COME EARLY FOR SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship prices keep on falling on the back of low freight rates. According to the latest report from shipbroker Allied Shipbroking, January sales seem ...
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- GAC Shipping (India) Pvt Ltd
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coalindo Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- MS Steel International - UAE
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- Tamil Nadu electricity Board
- Parliament of New Zealand
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Electricity Authority - India
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Georgia Ports Authority, United States
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- VISA Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- The University of Queensland
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Thai Mozambique Logistica
- Minerals Council of Australia
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