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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, 12 December 14
U.S WEEKLY COAL PRODUCTION UP 3.4% W/E DECEMBER 6
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19.6 million short tons (mmst) of coal ...
Wednesday, 10 December 14
SHIPPING MARKET INSIGHT - GEORGE ILIOPOULOS, INTERMODAL
COALspot.com: As 2014 is coming to an end, we look back to what has happened during the year and notice that SnP activity has been particularly sof ...
Wednesday, 10 December 14
WORLD HARD COAL MARKET 2014: PRODUCTION AND TRADE STAGNATING, IMPORTS TO GERMANY AND EUROPE ON THE DECLINE
Press Release: German Coal Importers Association (VDKi) criticizes regulations ordering reduction of CO2 emissions from coal-fired power plants as ...
Tuesday, 09 December 14
PRESSURE ON CHINA COAL MINERS TO CONTINUE DESPITE GOVERNMENT SUPPORT - FITCH
COALspot.com: Fitch Ratings says that Chinese coal mining companies will continue to be pressured by low prices, which will persist despite recent ...
Tuesday, 09 December 14
Q4' 2015, FOB INDONESIA COAL SWAP CLOSED AT $ 49.02 W/E 5 DEC
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month, week over week and day on day.
The Q1 swap has lost US$ 0.2 ...
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- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Gujarat Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Deloitte Consulting - India
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Orica Australia Pty. Ltd.
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Xindia Steels Limited - India
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Australian Coal Association
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- MS Steel International - UAE
- Marubeni Corporation - India
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- The University of Queensland
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- Bhatia International Limited - India
- The State Trading Corporation of India Ltd
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Siam City Cement - Thailand
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Manunggal Multi Energi - Indonesia
- Sree Jayajothi Cements Limited - India
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