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