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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, 01 May 20
GLOBAL COAL DEMAND TO FALL BY 8% IN Q1 2020 RELATIVE TO Q1 2019 - IEA
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Friday, 01 May 20
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Wednesday, 29 April 20
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Monday, 27 April 20
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A 58,000DWT VESSEL WAS FIXED DELIVERY SINGAPORE TRIP VIA INDONESIA, RE-DELIVERY WC INDIA, AT $4,500 - BALTIC BRIEFING
Capesize
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- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Thiess Contractors Indonesia
- Jaiprakash Power Ventures ltd
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Energy Link Ltd, New Zealand
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Globalindo Alam Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Timah Investasi Mineral - Indoneisa
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Standard Chartered Bank - UAE
- Directorate Of Revenue Intelligence - India
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Bhatia International Limited - India
- The University of Queensland
- San Jose City I Power Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- Minerals Council of Australia
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Kumho Petrochemical, South Korea
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- Australian Coal Association
- Energy Development Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Electricity Authority, New Zealand
- The Treasury - Australian Government
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
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