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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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Thursday, 06 February 14
THE WORLD LARGEST COAL EXPORTER SHIPPED AROUND 35.90 MMT OF COAL IN DECEMBER 2013
COALspot.com: Indonesia, the world 4th largest coal producer and the Global largest multi grade coal exporter shipped around $2* billion worth ...
Thursday, 06 February 14
PANAMAX: FAR EAST IS ALMOST ABSENT AND ATLANTIC ON SLOW STEAM
Handy
Due to ongoing Chinese New Year the market is still quiet. Slowly we can see some fresh coal cargos entering the market with second half Feb/ ...
Wednesday, 05 February 14
DRY BULK MARKET HAS LOST FURTHER GROUND THIS PAST WEEK - INTERMODAL
COALspot.com: The Dry Bulk market has lost further ground this past week as activity ex-Far East disappeared into the Chinese holidays and owners id ...
Wednesday, 05 February 14
MARKET INSIGHT - TASOS PAPADOPOULOS
KNOWLEDGE TO ELEVATE
COALspot.com: Let's take a break from market prospects, numbers, order book etc. and shed some light on the conclusions of ...
Tuesday, 04 February 14
NEWCASTLE PORT'S WEEKLY COAL EXPORTS HIT NEW HIGH OF 3.53 MMT
COALspot.com: In the week ended 3 February 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled ...
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- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- Madhucon Powers Ltd - India
- Planning Commission, India
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- The Treasury - Australian Government
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- VISA Power Limited - India
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- White Energy Company Limited
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Ministry of Mines - Canada
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- Thai Mozambique Logistica
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