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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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Wednesday, 12 February 14
NEW BUILDING ORDERS REACHING NEW POST-CRISIS HEIGHTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners are looking to take advantage of the last few attractive deals in the new building market, before prices start climbing to new highs and ...
Wednesday, 12 February 14
2013 WAS THE YEAR OF PRIVATE EQUITY FUNDING - TIMOS PAPADIMITRIOU
COALspot.com: People say that money makes the world go round. Well, can it be that it’s the other way around? Is it possible that money needs ...
Tuesday, 11 February 14
INDONESIAN COAL SWAP SHOWS STRONG GROWTH IN 2014 SECOND HALF
COALspot.com – Swaps prices slide for thermal coal loading from Indonesia, the world’s largest exporter of the fuel, according SGX.
T ...
Tuesday, 11 February 14
AUSTRALIA'S NEWCASTLE COAL EXPORTS SLIDE AROUND 15% WEEK ON WEEK
COALspot.com: In the week ended 10 February 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled ...
Tuesday, 11 February 14
SHIP OWNERS INVEST IN 447 NEWBUILDINGS AND SECOND HAND VESSELS DURING JANUARY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite a rough start to the year for the dry bulk freight market and lackluster performance from most other shipping sub-segments, ship owners have ...
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- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Planning Commission, India
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Posco Energy - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- Central Electricity Authority - India
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Parliament of New Zealand
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Romanian Commodities Exchange
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
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