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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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Tuesday, 18 June 19
TANKER SHIPPING: WHILE WE WAIT FOR 2020 TO KICK IN, IT'S ALL ABOUT POLITICS - BIMCO
Demand drivers and freight rates
Iran, Libya and Venezuela face export limitations because of sanctions and internal political troubles. At the s ...
Saturday, 15 June 19
SUPRAMAX: A 58,000-TONNER, OPEN QINGDAO, WAS BOOKED TO REDELIVER IN EAST COAST INDIA AT $6,500 - BALTIC BRIEFING
Capesize
The market closed on a quiet Friday last week after a few hectic days of mid-week trading. Trade routes from Brazil to the Far East we ...
Friday, 14 June 19
PANAMAX: OUTLOOK IS MIXED - FERNLEYS
Capesize
Sentiment changed to a more nervous tone as pacific cargo volumes failed to deliver as expected, however latest activity indicates res ...
Friday, 14 June 19
ELECTRONIC (PAPERLESS) TRADING - SKULD
KNOWLEDGE TO ELEVATE
Electronic Shipping Solutions: Bolero International Ltd, E-Title Authority Pte Ltd, Global Share S.A. (edoxOnline platfor ...
Wednesday, 12 June 19
KOSPO INVITES BIDS FOR 140,000 MT OF 4,600 NCV COAL FOR SEP. 2019 LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 140,000 MT of minimum 4,600 kcal/kg NCV coal ...
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- Baramulti Group, Indonesia
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Economic Council, Georgia
- ICICI Bank Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Minerals Council of Australia
- Eastern Coal Council - USA
- Renaissance Capital - South Africa
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Star Paper Mills Limited - India
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- Sojitz Corporation - Japan
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Videocon Industries ltd - India
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Medco Energi Mining Internasional
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Parliament of New Zealand
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
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