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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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Monday, 24 February 20
CHINA SAYS MAJOR COAL FIRMS RESTORE 95% OF PRODUCTION CAPACITY - REUTERS
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Sunday, 23 February 20
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A 57,000DWT SHIP FIXING DELIVERY SOUTH KALIMANTAN TRIP, REDELIVERY CJK, AT $7,600 - BALTIC BRIEFING
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- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Bhatia International Limited - India
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Australian Coal Association
- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- PTC India Limited - India
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Jorong Barutama Greston.PT - Indonesia
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- ICICI Bank Limited - India
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Latin American Coal - Colombia
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Uttam Galva Steels Limited - India
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