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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, 28 August 14
PANAMAX: OWNERS CAN GET AROUND USD 16000 FOR A FRONTHAUL; PERIOD MARKET - VERY QUIET - FEARNLEYS
Handy
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Thursday, 28 August 14
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Wednesday, 27 August 14
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Tuesday, 26 August 14
4TH ANNUAL ASIA NICKEL
4th Annual Asia Nickel
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Tuesday, 26 August 14
DESPITE LOW DRY BULK RATES, BULKER PRICES ARE STILL HIGH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Traditionally, August tends to be a month of slow activity in the sale and purchasing market and this year has been no exception. However, as shipb ...
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Baramulti Group, Indonesia
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- VISA Power Limited - India
- PTC India Limited - India
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Planning Commission, India
- Parliament of New Zealand
- IEA Clean Coal Centre - UK
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Madhucon Powers Ltd - India
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- White Energy Company Limited
- McConnell Dowell - Australia
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Indian Oil Corporation Limited
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- Minerals Council of Australia
- Electricity Authority, New Zealand
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- Tata Chemicals Ltd - India
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Energy Development Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Independent Power Producers Association of India
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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