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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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Sunday, 30 December 18
MAJOR LNG BUYERS' UNCONTRACTED DEMAND TO QUADRUPLE BY 2030 - WOOD MACKENZIE
Wood Mackenzie’s latest research reveals that uncontracted demand by the world’s seven largest LNG buyers could quadruple to 80 million ...
Saturday, 29 December 18
DELIVERY OF CARGO WITHOUT PRODUCTION OF THE ORIGINAL BILL OF LADING - TT CLUB
KNOWLEDGE TO ELEVATE
As the bill of lading is a document of title, a person presenting it to the carrier or its agent is ostensibly entitled t ...
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BIMCO 2020 SULPHUR CLAUSES: "A FAIR ALLOCATION OF RESPONSIBILITIES AND LIABILITIES'? - INCE & CO.
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Thursday, 27 December 18
DRY BULKERS SPOT FREIGHT MARKET W/E 21 DEC - ALLIED SHIPBROKING
Capesize
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- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- Sarangani Energy Corporation, Philippines
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- SMC Global Power, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- The University of Queensland
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Madhucon Powers Ltd - India
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Posco Energy - South Korea
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
- Planning Commission, India
- Romanian Commodities Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Interocean Group of Companies - India
- Grasim Industreis Ltd - India
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
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