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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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Friday, 11 January 19
SUPRAMAX: THE ASIAN ARENA HAD A MIXED START; LIMITED ACTION IN SOUTHEAST ASIA - THE BALTIC BRIEFING
Capesize
Dashed hopes summed up the first full week of the New Year. A slow start followed by a busy 24 hours of improving rates and a firming ...
Thursday, 10 January 19
BUNKER DELIVERY NOTE AMENDMENTS ENTER INTO FORCE AS SULPHUR 2020 REQUIREMENT LOOMS - IMO
KNOWLEDGE TO ELEVATE
Amendments to the bunker delivery note relating to the supply of marine fuel oil to ships which have fitted alternative m ...
Thursday, 10 January 19
WORLD TRADE IN THERMAL COAL IS ESTIMATED TO HAVE GROWN BY 1.0 PER CENT IN 2018 - DEPARTMENT OF INDUSTRY, AUSTRALIA
World Trade
World trade in thermal coal is estimated to have grown by 1.0 per cent to 1.1 billion tonnes in 2018 but it is expected to decline ...
Thursday, 10 January 19
PAKISTAN'S COAL IMPORTS TO SURGE TO 30 MILLION TONS PER ANNUM BY 2020 - CEO, PIB
Pakistan’s coal imports are estimated to surge to 30 million tons/annum from existing 20 million tons/annum by the year 2020, given the plann ...
Wednesday, 09 January 19
PANAMAX: THE PACIFIC SAW RELATIVELY GOOD DEMAND PARTICULARLY FROM INDONESIA AND NOPAC - BALTIC BRIEFING
Capesize
It was an active start to the New Year, with trading from West Australia maintaining momentum during the holiday period. Rates for Chi ...
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- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Aditya Birla Group - India
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Heidelberg Cement - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Makarim & Taira - Indonesia
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meralco Power Generation, Philippines
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Carbofer General Trading SA - India
- Parliament of New Zealand
- London Commodity Brokers - England
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Economic Council, Georgia
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Bhatia International Limited - India
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
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