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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, 26 August 14
GOVT ON TRACK TO LIMIT COAL OUTPUT - THE JAKARTA POST
The government has announced that it will proceed with plans to cap the production of coal next year, a move aimed not only at protecting the envir ...
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COAL CEOS: DEMISE OF COAL 'EXAGGERATED' - MARK WILCOX
By Mark Wilcox
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Monday, 25 August 14
INDO COAL SWAPS W-O-W: NEGATIVE; M-O-M: POSITIVE
COALspot.com: Indonesian coal swaps for average September 2014 decreased US$ 0.15 (-0.28%) day on day and US$ 0.65 (-1.19%) per mt week on week. Th ...
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- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- MS Steel International - UAE
- White Energy Company Limited
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Sical Logistics Limited - India
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Simpson Spence & Young - Indonesia
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Planning Commission, India
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
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