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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, 17 April 19
ONCE AGAIN WE FACED WITH THE SITUATION OF THE DRY BALTIC INDEX BEING BELOW 1,000 POINTS - INTERMODAL
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Wednesday, 17 April 19
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- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- VISA Power Limited - India
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Grasim Industreis Ltd - India
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- Standard Chartered Bank - UAE
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Energy Development Corp, Philippines
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Bahari Cakrawala Sebuku - Indonesia
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- GAC Shipping (India) Pvt Ltd
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- White Energy Company Limited
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- SMG Consultants - Indonesia
- Xindia Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- ASAPP Information Group - India
- Romanian Commodities Exchange
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Iligan Light & Power Inc, Philippines
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Medco Energi Mining Internasional
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
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