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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, 20 January 13
Q1 & Q4 SUB-BIT FOB INDONESIA COAL SWAPS: FIRM
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) and CFR South China coal shipment for average Q1’ 2013 delivery have gained 0.81percent and ...
Sunday, 20 January 13
S7 & S8 ROUTE FREIGHT TREND IS EXPECTED TO BE FLAT TO SOFT THIS WEEK - VISTAAR
COALspot.com - The freight market was fairly steady with all the indices BDI up by 9.21 pct closing at 837 points. The Cape index was also sharply u ...
Friday, 18 January 13
NEWLEAD HOLDINGS LTD. TO ACQUIRE TWO COAL PROPERTIES WITH ESTIMATED COAL RESERVES OF 18.6 MMT & 143.1 MMT
NewLead Holdings Ltd. Announces Signing Agreement to Acquire Properties with Estimated Coal Reserves of 18.6 Million Tons; Signing Agreement to Acqu ...
Friday, 18 January 13
DRY BULK MARKET ON THE RISE, ON STRONG DEMAND FOR CAPESIZE VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has continued its climbing trend yesterday, as the industry's benchmark, the Baltic Dry Index (BDI) was up by 39 points to 820. ...
Friday, 18 January 13
CAPESIZE : SIGNALS ARE MIXED BUT THE OVERALL TENDENCY IS POSITIVE - FEARNLEYS
Handy
The Atlantic market remained stable with USG-Feast fixed around USD 17k, according to fearnleys’s weekly report.
Continent / Medite ...
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- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Gujarat Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Leighton Contractors Pty Ltd - Australia
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Central Java Power - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- Commonwealth Bank - Australia
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- GMR Energy Limited - India
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Independent Power Producers Association of India
- Minerals Council of Australia
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- White Energy Company Limited
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
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