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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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Saturday, 07 December 13
A RARE TIME IN RECENT SHIPPING MARKET HISTORY: BOTH DRY BULK AND VLCC TANKER EARNINGS ARE ON THE RISE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Around this time of year, back in 2008, i.e. five years ago, the shipping markets were plagued with the aftermath of the global financial crisis tha ...
Friday, 06 December 13
INDONESIAN PARLIAMENT REJECTED A GOVERNMENT PROPOSAL TO EASE THE BAN ON EXPORTING UNPROCESSED ORE
COALspot.com: Indonesian House of Representatives rejected a proposal from Energy and Mineral Resources Minister Jero Wacik on to ease the ban on ex ...
Friday, 06 December 13
THE MINISTRY OF ENERGY & MINERAL RESOURCES OF INDONESIA FIXED DEC'13 HBA AT US$ 80.31
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has increased government declared coal bench mark price by US$ 2.18 / MT ...
Friday, 06 December 13
US PRODUCED APPROXIMATELY 82.8 MILLION SHORT TONS OF COAL IN NOVEMBER 2013
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.00 million short tons (mmst) of coal in ...
Friday, 06 December 13
PANAMAXES HAVE BEEN THE ' WEAPON OF CHOICE' BY MOST DRY BULK SHIP OWNERS DURING 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Low ship prices, the direct consequence of subdued freight rates for the larger part of 2013 have been the main driving force behind this year's ag ...
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- PTC India Limited - India
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- Tamil Nadu electricity Board
- Meralco Power Generation, Philippines
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- White Energy Company Limited
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Edison Trading Spa - Italy
- Planning Commission, India
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
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