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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, 30 May 16
BCI ENDING AT 830 POINTS, DOWN 4.6 PER CENT W/W
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities decline this week. The freight market was weak this past ...
Friday, 27 May 16
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Thursday, 26 May 16
GIANT ORE CARRIERS SET TO PLAY A BIGGER ROLE IN THE GLOBAL SHIPPING FLEET: CHINA EMBRACES VALEMAXES - RICHARD SCOTT
Another phase of the giant ships era is approaching. Chinese shipowners placed orders recently for 30 huge ‘valemax’ ore carriers. Thes ...
Wednesday, 25 May 16
MEDIATION AS A WAY TO RESOLVE DISPUTES IN THE SHIPPING INDUSTRY - LANA JACOBS
KNOWLEDGE TO ELEVATE
The shipping market is currently experiencing a serious recession with the Baltic Dry Index and Baltic Capesize Index bot ...
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Showing 2416 to 2420 news of total 6871 |
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- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Sinarmas Energy and Mining - Indonesia
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- India Bulls Power Limited - India
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- Madhucon Powers Ltd - India
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Power Finance Corporation Ltd., India
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Bhatia International Limited - India
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- Parliament of New Zealand
- Wood Mackenzie - Singapore
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- White Energy Company Limited
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- Economic Council, Georgia
- Offshore Bulk Terminal Pte Ltd, Singapore
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Planning Commission, India
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- Siam City Cement PLC, Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Trasteel International SA, Italy
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