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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, 09 December 13
SOUTH AFRICA'S RICHARDS BAY COAL EXPORTS IN NOVEMBER DECLINED 14.43% M-M
COALspot.com: South Africa's Richards Bay coal terminal exported 6.224 million tonnes of coal in November, declining by 1.05 million tons from the ...
Monday, 09 December 13
SUB-BIT INDONESIA COAL SWAP FOR Q3' 14 DELIVERY CLOSED $ 0.57 LESSER THAN Q1 CLOSING
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q1’ 14 delivery gained $ 1.49 pmt month on month on Friday 6 Decembe ...
Sunday, 08 December 13
SOUTH CHINA COAL SWAPS SHOW A DECLINE TREND IN Q2 & Q3' 14
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 6.76 percept month on month as on Friday 6 December 2013. T ...
Sunday, 08 December 13
RBCT SHIPPED 63.446 MMT OF COALS YTD
COALspot.com - Richards Bay Coal Terminal (RBCT), the world's single largest coal terminal has shipped 63,446,232 mt of coals YTD, according to por ...
Saturday, 07 December 13
SUPRAMAX SHIPS FOR EC INDIA TO CHINA ROUTE BEING FIXED AT AROUND US$ 13K - SOLYM
COALspot.com: The freight market continued to be firm due to high Iron ore demand. The cape index was up by almost 25 pct this week. The grain seaso ...
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- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Dalmia Cement Bharat India
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- Aboitiz Power Corporation - Philippines
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Posco Energy - South Korea
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Anglo American - United Kingdom
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- The University of Queensland
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Intertek Mineral Services - Indonesia
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Minerals Council of Australia
- Altura Mining Limited, Indonesia
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Wilmar Investment Holdings
- Energy Development Corp, Philippines
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
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