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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, 14 March 13
DRY BULK MARKET KEEPS ON RISING MOMENTUM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has maintained its rising momentum, on the back of increased cargo availability. According to yesterday's figures, the industry ...
Thursday, 14 March 13
SHIPPERS AND CARRIERS NEED GREATER COMMUNICATION AND MUTUAL UNDERSTANDING
Press Release – Shippers and shipping lines both need to raise their game if global container supply chains are not to be habitually subject t ...
Wednesday, 13 March 13
NEWBUILDING PRICES EXHIBIT NO FALL IN PAST SIX MONTHS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Despite the fact that oversupply has been the key plague of the shipping markets in recent years and newbuilding ordering activity has receded subst ...
Tuesday, 12 March 13
COAL MINING PRIVATIZATION IN INDIA: MUST - SUNIL K KUMBHAT
COALspot.com - India has the one of the richest coal reserves in the world and the country should have shown significant progress and gained the pos ...
Tuesday, 12 March 13
NEWCASTLE PORT SHIPPED 2.47 MILLION TONS OF COAL W/E 11 MARCH 2013
COALspot.com - Newcastle port in Australia has loaded 2,471,080 MT of thermal and coking coal for week ended 0700 hours 11 March 2013, Newcast ...
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- Banpu Public Company Limited - Thailand
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- Edison Trading Spa - Italy
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- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Heidelberg Cement - Germany
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- White Energy Company Limited
- GN Power Mariveles Coal Plant, Philippines
- Ceylon Electricity Board - Sri Lanka
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
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- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- Semirara Mining Corp, Philippines
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- New Zealand Coal & Carbon
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- Africa Commodities Group - South Africa
- Bhoruka Overseas - Indonesia
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- Larsen & Toubro Limited - India
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- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
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- Tamil Nadu electricity Board
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- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
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- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Renaissance Capital - South Africa
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
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- Merrill Lynch Commodities Europe
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- Thiess Contractors Indonesia
- Central Java Power - Indonesia
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- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
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- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- Electricity Generating Authority of Thailand
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- The University of Queensland
- Savvy Resources Ltd - HongKong
- Aditya Birla Group - India
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Planning Commission, India
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- Uttam Galva Steels Limited - India
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
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- Kobexindo Tractors - Indoneisa
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