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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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Sunday, 28 April 13
PANAMAX FREIGHT COULD BE SOFT NEXT WEEK - CAPT. REDDY
COALspot.com - This BDI closed slightly lower at 871 points (down by 1.91 pct) mainly due to drop in the Panamax index by almost 10 pct.
Th ...
Saturday, 27 April 13
HANDY : SLIDING ; PANAMAX : POSITIVE ; CAPESIZE : STILL ON ITS KNEES - FEARNRESEARCH
Handy
The Atlantic markets started sliding with no fresh cargoes seen in the market. The USG-Feast was at USD 18k and Black sea-Feast was at USD 11 ...
Saturday, 27 April 13
2ND CHINA INTERNATIONAL SHALE GAS SUMMIT
Press Release - 2nd China International Shale Gas Summit, 10-13 September 2013 | Chengdu, China
*The largest annual event for the shale gas indus ...
Friday, 26 April 13
LIMA SUMMIT IN JULY TO HIGHLIGHT LATIN AMERICAN MINING POTENTIAL
COALspot.com - Latin American mining industry officials and their private sector counterparts will be gathering in Lima, Peru on July 1-2 for the La ...
Wednesday, 24 April 13
FUTURE US POWER MARKET SHARES OF COAL, NATURAL GAS GENERATORS DEPEND ON RELATIVE FUEL PRICES - EIA
COALspot.com - In recent years, in US, natural gas competed more effectively with coal as a fuel for electricity generation as the cost of operating ...
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- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Australian Coal Association
- Krishnapatnam Port Company Ltd. - India
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Savvy Resources Ltd - HongKong
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- The University of Queensland
- Marubeni Corporation - India
- Ministry of Mines - Canada
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- White Energy Company Limited
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- The State Trading Corporation of India Ltd
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- SN Aboitiz Power Inc, Philippines
- ASAPP Information Group - India
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