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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, 22 November 12
HANDY: INDO-INDIA, LARGE ECO SUPRA NOW FIXED AT USD 12500 - FEARNRESEARCH
Handy
The north Continent is seeing plenty of tonnages but lack of cargoes. TA business are around 11k and fronthaul is around 17k.Tonnages has tig ...
Thursday, 22 November 12
DRY BULK MARKET RISE, BUT OUTLOOK SEEN DIM ON THE BACK OF RECORD NEW BUILDING DELIVERIES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been under hefty pressure since the start of the year, as a result of record newbuilding deliveries and below-par demand for ...
Wednesday, 21 November 12
LITTLE IMPACT FROM DISSOLUTION OF BP MIGAS ON INDONESIAN OIL & GAS COMPANIES - FITCH
Fitch Ratings has said that the recent court order to abolish the Indonesian upstream oil and gas regulator, BP Migas, has minimal immediate impact ...
Wednesday, 21 November 12
ORPHEUS ENERGY SECURES FIRST COAL OFF TAKE CONTRACT
COALspot.com - Orpheus Energy Limited (ASX:OEG) has announced that it has signed a coal sales contract with an Indonesian steel manufacturing compan ...
Tuesday, 20 November 12
AUSTRALIAN NEWCASTLE PORT HAS LOADED 13.18 PERCENT LESS COAL W-W
COALspot.com - Newcastle port in Australia has loaded 2,691,731 MT of thermal and coking coal for week ended 0700 hours 19 November 2012, Newc ...
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- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- VISA Power Limited - India
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Planning Commission, India
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- MS Steel International - UAE
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- Australian Coal Association
- Videocon Industries ltd - India
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Bharathi Cement Corporation - India
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- The University of Queensland
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Barasentosa Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- Posco Energy - South Korea
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Parry Sugars Refinery, India
- Goldman Sachs - Singapore
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Power Finance Corporation Ltd., India
- McConnell Dowell - Australia
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- PTC India Limited - India
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
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