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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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Sunday, 23 November 14
ITALY'S STEAM COAL IMPORTS TO DROP BY 11% IN 2014 - ASSOCARBONI
COALspot.com: Italy’s steam coal imports expected to drop to 16 million tons in 2014 (-11% compared to 2013); coking coal imports to plunge t ...
Saturday, 22 November 14
THE FALL IN BUNKER PRICES REDUCE FUEL COSTS SIGNIFICANTLY - BIMCO, PETER SAND
For a ship that burns 24 tonnes of fuel per day while steaming, fuel costs are reduced by as much as USD 1 million a year if current price level st ...
Saturday, 22 November 14
DRY BULKERS NEWBUILDING DELIVERIES REACHED 11.8 MILLION DWT DURING THIRD QUARTER, NET FLEET GROWTH FOR 2014 TO REACH 5% - HELLENIC SHIPPING NEWS
The dry bulk market has rebounded since its less than impressive performance since the start of the year, but overall, third quarter figures could ...
Friday, 21 November 14
BUMI ENTERS INTO CONDITIONAL SALE & PURCHASE AGREEMENT TO SELL FBS STAKE
COALspot.com: PT Bumi Resources Tbk, one of the Indonesia's largest coal producers confirms that it has executed a Conditional Sale and Purchas ...
Friday, 21 November 14
U.S LAST WEEK'S COAL PRODUCTION STAYS FLAT W-O-W
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.9 million short tons (mmst) of coal ...
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- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Parliament of New Zealand
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- McConnell Dowell - Australia
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Wilmar Investment Holdings
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- Economic Council, Georgia
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Romanian Commodities Exchange
- London Commodity Brokers - England
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Carbofer General Trading SA - India
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
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