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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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Friday, 05 April 13
SGX API 8 CFR SOUTH CHINA COAL SWAPS TO GO LIVE
COALspot.com - The Exchange has announced that the SGX API 8 CFR South China Coal Swap will go live for clearing on SGX-DC starting from 29 Ap ...
Thursday, 04 April 13
HANDY:QUIET ; PANAMAX: SLOW START; CAPESIZE: LOW ACTIVITIES - FEARNRESEARCH
Handy
The Atlantic markets remain quiet as charterers and owners waiting to see how it moves. The USG-Feast was at USD 20k and Black Sea-Feast was ...
Wednesday, 03 April 13
HBA HAS LOST US$ 1.53 PER MT IN APRIL 2013
COALspot.com - The Indonesian government’s declared coal bench mark price has lost $1.53 / MT in April 2013.
The monthly coal referen ...
Tuesday, 02 April 13
AUSTRALIA'S NEWCASTLE PORT SHIPPED 633K MT MORE COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 3,029,482 tons of thermal and coking coal for week ended 0700 hours 1 April 2013, Newcas ...
Tuesday, 02 April 13
THE GOVERNORS TO TAKE OVER AUTHORITY OF MINING, FORESTRY AND PLANTATION CONCESSIONS
The Indonesian government is planning to transfer the authority of issuing mining, forestry and plantation concessions from municipalities and distr ...
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- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Rashtriya Ispat Nigam Limited - India
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- The University of Queensland
- Posco Energy - South Korea
- Kumho Petrochemical, South Korea
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
- ICICI Bank Limited - India
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Intertek Mineral Services - Indonesia
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- The Treasury - Australian Government
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
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