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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, 11 March 19
SUPRAMAX: A 61,000 DWT VESSEL WAS BOOKED SINGAPORE FOR A TRIP VIA INDONESIA TO CHINA AT $10,500 - BALTIC BRIEFING
Capesize
A faint glimmer of hope with the suggestion the market may have finally bottomed out, with owners attempting to resist further cuts in ...
Friday, 08 March 19
KOMIPO INVITES BIDS FOR 2.6 MILLION TONS OF AUSTRALIAN 5700 NAR COAL FOR FIVE YEARS
South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 520,000 MT of min. 5700 NAR coal of Australian origin to be burnt ...
Friday, 08 March 19
CHINA'S COAL DEMAND FORECAST TO DROP SLOWLY - YONHAP
China’s coal demand is expected to fall at a snail’s pace over the next 20 years due to the country’s preference for the cheap fo ...
Thursday, 07 March 19
INDONESIAN COAL PRICE REFERENCE PLUNGE TO LOWEST IN SEVEN MONTHS
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 06 March 19
KOSPO INVITES BIDS FOR 80,000 MT OF 3800 NCV COAL FOR 21 - 30 MARCH, 2019 LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 80,000 MT of min 3,800 kcal/kg NCV low calor ...
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- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Siam City Cement - Thailand
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Neyveli Lignite Corporation Ltd, - India
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- San Jose City I Power Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- CNBM International Corporation - China
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Authority, New Zealand
- Kobexindo Tractors - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
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