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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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Thursday, 27 October 16
PANAMAX: FIRM ATLANTIC; TOPPISH PACIFIC - FEARNLEYS
Supramax
The trend from last week is passed on. ECSA still strong with Supras from N Brazil to Med fixed at $9,000 to $9,500 daily.
Accordin ...
Wednesday, 26 October 16
SHIPPING MARKET INSIGHT - KONSTANTINOS KONTOMICHIS
If the finale of a thriller movie finds the leading actor successfully surviving after all the sacrifices he has made, the audience presumes this t ...
Tuesday, 25 October 16
INDONESIAN COAL PRICES MARCH HIGHER CONTINUES
COALspot.com: A rally in thermal coal prices over the past few months, after years of decline, is still continuing and it is expected to rally at l ...
Tuesday, 25 October 16
THINGS ARE SLOWLY STARTING TO IMPROVE AS CORRECTIONS ARE MADE - ALLIED
It seems as though left, right and centre, all we see nowadays is the word “restructuring”.
There is restructuring amongst bankers ...
Monday, 24 October 16
KOMIPO INVITES BIDS FOR 0.78 MILLION TONS OF BITUMINOUS COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 780,000 Metric Tons of Bituminous Coal for its B ...
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- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Mercuria Energy - Indonesia
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- Orica Mining Services - Indonesia
- Mjunction Services Limited - India
- PTC India Limited - India
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- MS Steel International - UAE
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- White Energy Company Limited
- The Treasury - Australian Government
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
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