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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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Monday, 31 December 12
"DISTRESSED", "ECO" AND "FINANCE" ARE THE THREE WORDS WHICH CHARACTERIZED 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
2012 was yet another year of speculation, anticipation, pessimism and more speculation in the shipping markets. According to the latest weekly repor ...
Saturday, 29 December 12
SHIPBREAKING YARDS IN INDIA DEMOLISH A TOTAL OF 527 VESSELS IN 2012, BREAKING ALL PREVIOUS RECORDS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
India's ship demolition experts of Star Matrix contemplated this week on the issue of why ships in the range of 1,000 and up to 6,500 liquid tons ( ...
Thursday, 27 December 12
A LOOK AT WORLD TRADE PATTERNS DURING 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
While China's leaders are likely to stick with the 2012 economic growth rate of 7.5% when they chart a course for 2013 - its weakest pace since 199 ...
Thursday, 27 December 12
INDONESIA SHIPPED 33.578* MMT COAL IN NOVEMBER
COALspot.com: Indonesia, the world largest multi grade coal exporter has shipped 33.578* million tons of coal in November 2012. thi ...
Wednesday, 26 December 12
UPDATE ON EXPORT BAN ON RAW MINERALS AND ORE - RITA SUSANTO
COALspot.com - In May 2012, the Minister of Energy and Mineral Resources (“MoEMR”) in Regulation No.7 (“Reg-7”, amended by R ...
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- Xindia Steels Limited - India
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- The University of Queensland
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Latin American Coal - Colombia
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Maheswari Brothers Coal Limited - India
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Dalmia Cement Bharat India
- PTC India Limited - India
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Energy Development Corp, Philippines
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Trasteel International SA, Italy
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
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