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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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Wednesday, 18 March 20
SHIPPING MARKET INSIGHT - INTERMODAL
Despite we all knew about the Covid-19 weeks ago, few could realize the size of the thread until the last few days. The examples of China and Italy ...
Tuesday, 17 March 20
IT IS NOW UNQUESTIONABLE THAT 2020 WILL BE A MILESTONE YEAR FOR THE OIL MARKET, AS WELL AS THE WHOLE GLOBAL ECONOMY - ALLIED
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Monday, 16 March 20
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Capesize
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Sunday, 15 March 20
CAPTIVE COAL OUTPUT RISES 19% IN APRIL-FEBRUARY - FINANCIAL EXPRESS
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- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Energy Link Ltd, New Zealand
- Australian Coal Association
- GMR Energy Limited - India
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Kalimantan Lumbung Energi - Indonesia
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Riau Bara Harum - Indonesia
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Krishnapatnam Port Company Ltd. - India
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