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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, 06 January 14
INDONESIAN COAL SWAPS SLIDE TO $ 61.25 FOR Q4' 14 DELIVERY
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery lost $ 0.32 pmt month on month on Friday 3 January 2014. Th ...
Sunday, 05 January 14
API 8 CFR SOUTH CHINA COAL SWAP FOR Q3 DELIVERY CLOSED $ 80.05, A $ 0.90 LOWER THAN Q1 PRICE
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery lost 1.40 percept day on day closed at US$ 80.95 per mt as o ...
Sunday, 05 January 14
CENTRAL BUREAU OF INVESTIGATION OF INDIA REGISTERS CASES IN CONNECTION WITH ALLEGED SUPPLY OF LOW QUALITY INDONESIAN COAL BY A PRIVATE COMPANY TO NTPC & NSPCL
COALspot.com: The Central Bureau of Investigation of India has registered two cases regarding alleged supply of low quality imported Indonesian coal ...
Saturday, 04 January 14
THE INDONESIAN GOVERNMENT TO DOWNSIZE ITS COAL PRODUCTION TARGET TO 400 MMT THIS YEAR
COALspot.com: Indonesia to downsize its coal production target to 400 million tons in 2014, lower than the production in 2013, which stood at 421 mi ...
Friday, 03 January 14
IN 2013 RBCT HAS, FOR THE FIRST TIME, EXPORTED MORE THAN 70 MILLION TONS OF COAL
COALspot.com: South Africa's Richards Bay coal terminal, the world’s largest single coal exporting terminal shipped 6.788 million tonnes of c ...
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- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Medco Energi Mining Internasional
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Semirara Mining and Power Corporation, Philippines
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- MS Steel International - UAE
- Minerals Council of Australia
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- The University of Queensland
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- Australian Coal Association
- Altura Mining Limited, Indonesia
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