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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, 01 August 13
CAPESIZE: THE FLOW OF CARGOES REMAINS RELATIVELY STABLE, AND THE PACIFIC IS LOOKING PROMISING - FEARNLEYS AS
Handy
The Pacific market is still facing low activity, so no wonder that the tonnage list is getting longer. It´s still Ramadan and only a fe ...
Wednesday, 31 July 13
COAL GASIFICATION
IBC’s Coal Gasification conference explores the opportunities for coal gasification investment and development in Asia.
With depleting dome ...
Wednesday, 31 July 13
SUPRAMAX : THE PACIFIC BASIN WAS MOVING ON A POSITIVE PATH - EVA TZIMA
COALspot.com: Cape - Despite holding their ground fairly well early on in the week, Capes in the Atlantic basin gave in to the mounting pressure fro ...
Tuesday, 30 July 13
HARD COAL ON THE WAY TO BECOMING THE WORLD'S MOST IMPORTANT ENERGY SOURCE - VDKI
Press Release : Hard coal continued to be the world’s fastest-growing fossil primary energy source in 2012. It covered about 28% of the world ...
Tuesday, 30 July 13
WIJAYA TRI UTAMA PURCHASES MICROCOAL TECHNOLOGIES' CLEAN COAL UPGRADING FACILITY
- First MCI commercial scale application of proprietary microwave technology to upgrade coal thermal output and reduce pollutants
- MicroCoal to re ...
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- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- PTC India Limited - India
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Mercuria Energy - Indonesia
- Bhushan Steel Limited - India
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Australian Coal Association
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- White Energy Company Limited
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Commonwealth Bank - Australia
- Mercator Lines Limited - India
- Ministry of Transport, Egypt
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Planning Commission, India
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