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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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Friday, 20 May 16
U.S COAL PRODUCTION FOR THE WEEK ENDED 14 MAY TOTALED 11.4 MMST; UP 3.8% W/W
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 11.4 million short tons (mm ...
Thursday, 19 May 16
AUSTRALIAN IRON ORE CARGOES PUSHED UP THE FREIGHT RATES FOR CAPE THIS WEEK - FEARNLEYS
Cape
It has been a big jump in the freight rates for Cape size this week, says Fearnleys in its latest weekly report. All of the Australian iron ...
Thursday, 19 May 16
DISPUTE OVER VAT ON COAL DRAGS ON, CAUSING DOUBLE-BLOW TO MINERS - JP
The dispute over the value-added tax ( VAT ) mechanism between coal miners operating under third-generation contracts and the Finance Ministry&rsqu ...
Wednesday, 18 May 16
DRY BULK OUTLOOK REMAINS GLOOMY SAYS DANISH SHIP FINANCE, AS SHIPPING NEEDS TO RETHINK BUSINESS MODEL - HELLENIC SHIPPING
Our Shipping Market Review – May 2016 is devoted to the fourth industrial revolution. To understand the truly disruptive nature of the fourth ...
Wednesday, 18 May 16
LONG TERM FUNDAMENTALS ARE SLOWLY IMPROVING FOR THE DRY BULK MARKET - INTERMODAL
As we are approaching the end of the first half of the year, there is a number of market participants over at the dry bulk sector that have started ...
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Showing 2426 to 2430 news of total 6871 |
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- White Energy Company Limited
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Meenaskhi Energy Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Riau Bara Harum - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Manunggal Multi Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Orica Australia Pty. Ltd.
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Marubeni Corporation - India
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Sinarmas Energy and Mining - Indonesia
- London Commodity Brokers - England
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- CNBM International Corporation - China
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Attock Cement Pakistan Limited
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
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