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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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Wednesday, 08 January 14
SHIPPING: THE ABSOLUTE BOTTOM OF THE CYCLE WAS REACHED AND PASSED - GEORGE LAZARIDIS
COALspot.com: To many in the industry 2013 has been the turning point in the market where the absolute bottom of the cycle was reached and passed.
...
Tuesday, 07 January 14
INDONESIA RAISES COAL PRICE THIS MONTH
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has increased government declared coal bench mark price by US$ 1.59 / MT ...
Tuesday, 07 January 14
NEWCASTLE COAL TERMINAL'S COAL EXPORTS SLIDE TO 3.54 MMT W/E 30 DECEMBER 13
COALspot.com: In the week ended December 30, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.54 ...
Tuesday, 07 January 14
US COAL OUTPUT SLIDES 9 PCT WEEK ON WEEK, EIA SAYS
COALspot.com – United States the world’s second largest coal producer, produced approximately 17.8 million short tons (mmst) of coal in ...
Monday, 06 January 14
ARGUS LAUNCHES SPOT CFR EAST COAST INDIA COAL ASSESSMENTS
COALspot.com: Global energy and commodity news and price reporting agency Argus has announced today that, the company has launched CFR coal assessme ...
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- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Samtan Co., Ltd - South Korea
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Indogreen Group - Indonesia
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- Coal and Oil Company - UAE
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- The University of Queensland
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Indo Tambangraya Megah - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Coal Council - USA
- SN Aboitiz Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- McConnell Dowell - Australia
- Rio Tinto Coal - Australia
- MS Steel International - UAE
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- Tamil Nadu electricity Board
- PTC India Limited - India
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Independent Power Producers Association of India
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- Bhoruka Overseas - Indonesia
- Meenaskhi Energy Private Limited - India
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Simpson Spence & Young - Indonesia
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Australian Coal Association
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- New Zealand Coal & Carbon
- Sree Jayajothi Cements Limited - India
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
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