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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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Tuesday, 27 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS JUMPED 15.59 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 15.59 per cent week on week to 2.76 million mt for ...
Monday, 26 August 13
CARRIAGE OF COAL CARGOES FROM KALIMANTAN, INDONESIA - WEST OF ENGLAND P&I CLUB
The Club has recently been advised by consulting scientists and engineers Dr J H Burgoyne and Partners (International) Limited that the number of in ...
Sunday, 25 August 13
API 8 CFR SOUTH CHINA COAL: HEADING TO NORTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery US$ 2.39 up month on month. The swap was moved positive ...
Sunday, 25 August 13
THE FREIGHT MARKET S7 & S8 SECTOR IS EXPECTED TO BE STEADY/FIRM NEXT WEEK - VISTAAR
COALspot.com - The freight market continued to be firm with all indices moved positive except for Panamax which was slightly down (2 pct down).
T ...
Friday, 23 August 13
US PRODUCED MORE COAL WEEK ON WEEK - EIA
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.80 million short tons (mmst) of ...
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- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Economic Council, Georgia
- Parry Sugars Refinery, India
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- The University of Queensland
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- Sarangani Energy Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- Indogreen Group - Indonesia
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Petron Corporation, Philippines
- Posco Energy - South Korea
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
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