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