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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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Sunday, 13 October 13
API 8 CFR SOUTH CHINA COAL - AVERAGE Q4 2013 DELIVERY FELL 0.30 PERCEPT ON WEEK
COALspot.com : API 8 CFR South China Coal swaps for average Q4 2013 delivery fell 0.30 percept week on week on Friday 11 October 2013. The CFR South ...
Saturday, 12 October 13
PANAMAX: OWNERS ARE AT US$ 17-18.5K PER DAY; CHARTERERS ARE AT US$ 15.5-16K - CAPT. REDDY
COALspot.com - The futures market was heavily down on the cape size vessels and the physical average charterer rates on cape size vessels dropped by ...
Friday, 11 October 13
DRY BULK FREIGHT RATE POSITIVE MOMENTUM TO BE SUPPORTED BY HIGHER DEMAND SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
BIMCO released its latest short term research on the shipping markets, estimating that the elevated level of Capesize TC average rates i ...
Friday, 11 October 13
US COAL PRODUCTION FALLS 7.70% IN SEPTEMBER
COALspot.com – United States the world’s second largest coal producer produced approximately 17.70 million short tons (mmst) of coal in ...
Thursday, 10 October 13
NPC AUSTRALIA SHIPPED 2.99 MILLION TONS OF COAL W-O-W
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 12.04 per cent week on week to 2.99 million mt for ...
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- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Leighton Contractors Pty Ltd - Australia
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Petron Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- London Commodity Brokers - England
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indian Oil Corporation Limited
- Bangladesh Power Developement Board
- PTC India Limited - India
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Australian Coal Association
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Planning Commission, India
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Minerals Council of Australia
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Tamil Nadu electricity Board
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
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