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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, 04 November 14
INDONESIAN COAL SWAPS FOR 2015 DELIVERIES SHOW A WEAK TREND
COALspot.com: Indonesian coal swaps for delivery Q4' 2014 lost month on month and gained day on day and week on week, the trend was same as las ...
Tuesday, 04 November 14
FOB NEWCASTLE COAL SWAPS GAINED WEEK OVER WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2014 delivery decreased US$ 1.09 (-1.99%) month over month and increased US$ 0.31 (+0.58% ...
Monday, 03 November 14
ADARO PRODUCED 41.90MT OF COAL FOR FIRST 9 MONTHS OF 2014
COALspot.com: Adaro’s coal production in the third quarter reached 14.03 Mt, a 2% increase compared to the same period of last year. Accordin ...
Monday, 03 November 14
CFR SOUTH CHINA COAL SWAP FOR Q4' 2014 DELIVERY LOST 2.80% MONTH OVER MONTH
COALspot.com: API 8 CFR South China Coal swap for Q4’ 2014 delivery has decreased US$ 1.86 (-2.80%) month over month and increased US$ 0.37 ( ...
Monday, 03 November 14
INDONESIAN'S COAL EXPORTS JUMP IN SEPTEMBER
COALspot.com: Indonesia, one of the world's largest coal producers and the global leading multi grade coal exporter shipped around $1.50 ...
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- Riau Bara Harum - Indonesia
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Meenaskhi Energy Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Port Waratah Coal Services - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- VISA Power Limited - India
- Deloitte Consulting - India
- White Energy Company Limited
- The Treasury - Australian Government
- The University of Queensland
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Sical Logistics Limited - India
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Sakthi Sugars Limited - India
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Australian Coal Association
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