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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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Saturday, 03 September 11
TNPL TO BUY 240K MT OF NON-COKING COAL
COALspot.com - Tamil Nadu Newsprint and Papers Limited (TNPL), is seeking to procure 240,000 MT +/- 5 percent of non-coking imported coal with ...
Friday, 02 September 11
CAPESIZE DEMAND LIFTS DRY BULK MARKET ONCE AGAIN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In what proves to be the best week of the year for Capesize owners, strong demand has helped propel the dry bulk market to new highs yesterday. The ...
Thursday, 01 September 11
EWP TO BUY 195KT OF VIETNAM COAL
COALspot.com - Korea Midland Power (KOMIPO) has issued an International open bidding for 490kt of sub bituminous coal, according to a bid invitation ...
Thursday, 01 September 11
DRY BULK MARKET TAKES GREAT LEAP FORWARD - NIKOS ROUSSANOGLOU
In what turned out to be a rather hopeful ending of the month, the last day of August saw the dry bulk market’s benchmark, the BDI (Baltic Dry ...
Tuesday, 30 August 11
FAUJI CEMENT CONSUMED MORE THAN 1 MILLION TONS OF LOCAL COAL
Cooper Minerals Inc.based in Vancouver, BC, Canada, is a junior exploration company engaged in the acquisition, exploration and development of miner ...
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- Bukit Makmur.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- Australian Coal Association
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- The Treasury - Australian Government
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Marubeni Corporation - India
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- MS Steel International - UAE
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Aditya Birla Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Eastern Coal Council - USA
- Grasim Industreis Ltd - India
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
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