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