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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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Monday, 29 September 14
INDONESIAN COAL EXPORT VOLUME FALL IN AUGUST
COALspot.com: Indonesia, one of the world's largest coal producers and the global leading multi grade coal exporter shipped around $1.50 ...
Monday, 29 September 14
INDONESIAN COAL SWAPS LOST WEEK ON WEEK AND MONTH OVER MONTH
COALspot.com: Indonesian coal swaps for average November 2014 flat day on day and lost US$ 0.85 (-1.66%) per mt week on week. The swap also lost US ...
Monday, 29 September 14
CFR SOUTH CHINA COAL LOST AROUND 5% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swap for delivery in November 2014 decreased US$ 3.55 (-5.10%) month over month and flat week over week.
...
Sunday, 28 September 14
FREIGHT RATES FROM INDONESIA TO INDIA IS EXPECTED TO BE FIRM NEXT WEEK - CAPT. REDDY
COALspot.com: The freight market shows a bit weak trend this week.
The BDI was lost 2.42% week on week and closed at 1049 points on 26 Se ...
Sunday, 28 September 14
BERAU AGREES DEAL WITH GOVT, MINING AREA REDUCED - THE JAKARTA POST
Coal miner PT Berau Coal, a subsidiary of Jakarta-listed PT Berau Coal Energy (BRAU), has signed a memorandum of understanding (MoU) with the gover ...
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- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Lanco Infratech Ltd - India
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Rio Tinto Coal - Australia
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Bukit Makmur.PT - Indonesia
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Iligan Light & Power Inc, Philippines
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Indonesian Coal Mining Association
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- The University of Queensland
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- PetroVietnam Power Coal Import and Supply Company
- Videocon Industries ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
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