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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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Tuesday, 28 August 18
COURT CONCLUDES DELIVERY MADE IN ACCORDANCE WITH TERMS OF LOIS - INCE&CO
Glencore Agriculture BV v Navig8 Chemicals Pool Inc (Songa Winds) [2018] EWCA 1901 (Civ)
In this case, the Commercial Court fo ...
Tuesday, 28 August 18
SUPRAMAX: A COAL TRIP VIA INDONESIA PAID $13,500 ON A 56,000DWT TO WC INDIA - BALTIC BRIEFING
Capesize
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Tuesday, 28 August 18
SHIPPING MARKET UPDATE - GEORGE LAZARIDIS
As we edge close to the start of the Autumn Season, a period within the year that is usually characterized as the pivot point from the final quarte ...
Friday, 24 August 18
KOREAN RESTRICTIONS ON COAL SULPHUR IMPACTING HUNTER EXPORTS - THE HERALD
WARNINGS that Korean restrictions on sulphur levels in coal could hurt the Hunter industry appear to have been accurate, according to a report in t ...
Thursday, 23 August 18
RUSSIA'S MECHEL PRODUCED 9.69 MMT OF RUN-OF-MINE COAL IN 1H'2018
Mechel PAO, one of the leading Russian mining and metals companies, announces 1H2018 operational results.
Mechel PAO’s Chief E ...
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- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Ministry of Mines - Canada
- Thiess Contractors Indonesia
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Goldman Sachs - Singapore
- ASAPP Information Group - India
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Chettinad Cement Corporation Ltd - India
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- GMR Energy Limited - India
- New Zealand Coal & Carbon
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- VISA Power Limited - India
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- Indogreen Group - Indonesia
- Minerals Council of Australia
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- SMG Consultants - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Aditya Birla Group - India
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
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