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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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Monday, 02 July 18
THIESS SECURES NEW QCOAL NORTHERN HUB $480M CONTRACT
Thiess has been awarded a new A$480 million contract by QCoal to continue operations at the QCoal Northern Hub located in Queensland’s Bowen ...
Friday, 29 June 18
THE LBH GROUP AND RHENUS PLAN TO ESTABLISH A JOINT COMPANY
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Capesize
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Friday, 29 June 18
JAPAN'S TOHOKU ELEC, GLENCORE ABANDON APRIL-MARCH COAL CONTRACT TALKS - REUTERS
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Wednesday, 27 June 18
SHIPPING MARKET INSIGHT - APOSTOLOS ROMPOPOULOS
After the abolishment of the trade embargo against Iran, there was a lot of optimism from the country’s side, as after quite some time a numb ...
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- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- SMC Global Power, Philippines
- Minerals Council of Australia
- Indian Energy Exchange, India
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
- ICICI Bank Limited - India
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Petron Corporation, Philippines
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- OPG Power Generation Pvt Ltd - India
- Mercator Lines Limited - India
- Coastal Gujarat Power Limited - India
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- White Energy Company Limited
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Star Paper Mills Limited - India
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- GMR Energy Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Independent Power Producers Association of India
- The Treasury - Australian Government
- Metalloyd Limited - United Kingdom
- Economic Council, Georgia
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Rio Tinto Coal - Australia
- AsiaOL BioFuels Corp., Philippines
- SMG Consultants - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
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