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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, 06 February 19
FEBRUARY 2019 INDONESIA'S COAL REFERENCE PRICE FELL 8.83 PERCENT YOY
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Wednesday, 06 February 19
THE BDI HAS EASED BACK TO 645 BP, ITS LOWEST LEVEL SINCE AUGUST 2016 - ALLIED
The dry bulk sector is in the doldrums, with most market participants seemingly left utterly perplexed, and simultaneously, in pursuit of any posit ...
Monday, 04 February 19
COAL STILL IN HIGH DEMAND GLOBALLY
Although the world is switching to renewable energy there is still a big demand for coal around the globe.
This is according to Cany ...
Friday, 01 February 19
ULTRAMAX WAS FIXED DELIVERY KALIMANTAN, FOR TRIP TO WEST COAST INDIA AT $7,000 - BALTIC BRIEFING
Capesize
The Vale dam tragedy sparked a sharp fall in rates across all regions even where tonnage remained tight. The potential loss of product ...
Friday, 01 February 19
SEMBCORP SELECTS NORDEN FOR LONG-TERM INDIAN CONTRACT
NORDEN A/S has signed a 10-year Panamax Contract of Affreightment (COA) with Indian utility firm Sembcorp Energy India Ltd.
From 1 A ...
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- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- Dalmia Cement Bharat India
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Planning Commission, India
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Indogreen Group - Indonesia
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Videocon Industries ltd - India
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- PTC India Limited - India
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Transport, Egypt
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Bukit Baiduri Energy - Indonesia
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- The University of Queensland
- GAC Shipping (India) Pvt Ltd
- Bharathi Cement Corporation - India
- Parliament of New Zealand
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- Antam Resourcindo - Indonesia
- Indonesian Coal Mining Association
- Asmin Koalindo Tuhup - Indonesia
- Star Paper Mills Limited - India
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
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