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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, 07 October 14
API 8 CFR SOUTH CHINA COAL SWAP HEADED SOUTH
COALspot.com: API 8 CFR South China Coal swap for delivery in November 2014 decreased US$ 1.10 (-1.64%) month over month and US$ 0.25 (-0.38%) ...
Monday, 06 October 14
' COAL-BY-WIRE' FROM SUMATRA TO JAVA - THE JAKARTA POST
Coal from the island of Sumatra accounts for most of Indonesia’s low-grade lignite, a low-quality coal that receives a poor price in internat ...
Monday, 06 October 14
THE IRON ORE SHIPPING BUSINESS IS FACING SOME ROUGH SEAS - EAST ASIA FORUM
The impact of Chinese demand on global iron ore prices is well known. A less acknowledged consequence of China’s emergence is the transformat ...
Sunday, 05 October 14
BALTIC DRY INDEX SLIPS 1.14%; BALTIC PANAMAX INDEX GAINED 9.91% WEEK ON WEEK
COALspot.com: The BDI was down by 1.14 pct and closed at 1037 points this Friday.
The Cape index was down significantly week on week or lost 5 ...
Friday, 03 October 14
U.S. WEEKLY COAL PRODUCTION UP 5.8% TO 19.9 MMST
COALspot.com – United States the world's one of largest coal producers, produced approximately 19.9 million short tons (mmst) of co ...
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- Xindia Steels Limited - India
- Posco Energy - South Korea
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- PowerSource Philippines DevCo
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- PNOC Exploration Corporation - Philippines
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- The University of Queensland
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Marubeni Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- Videocon Industries ltd - India
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Trasteel International SA, Italy
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- Central Electricity Authority - India
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
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