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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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Friday, 16 November 12
SHIP OWNERS KEEP ON INVESTING IN SECOND HAND VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Priced attractively, modern and with prompt delivery dates, second hand vessels are proving to be rather popular among cash-rich ship owners these d ...
Friday, 16 November 12
HANDY : IRON ORE WAS QUIET AND RATES FROM INDIA TO CHINA AROUND USD 5500
Handy
The Atlantic was weak with more supply of ships. Rates from Continent/ Feast at USD 9000 and from USG/China at USD 15k. The Pacific market re ...
Wednesday, 14 November 12
AUSTRALIAN NEWCASTLE PORT HAS LOADED 11.14 PERCENT MORE COAL W-W
COALspot.com - Newcastle port in Australia has loaded 3,100,686 MT of thermal and coking coal for week ended – 0700 hours 12 November 2012, Ne ...
Tuesday, 13 November 12
INITIAL COAL PRODUCTION AT KATINGAN RIA ON TRACK FOR 2013 FOLLOWING GRANTING OF 'IN PRINCIPLE' FORESTRY PERMIT, INDONESIA
Realm Resources Ltd (“Realm” or the “Company” - ASX: RRP) has announced that its application to upgrade its exploration fore ...
Tuesday, 13 November 12
BULK PORTS & TECHNOLOGY ASIA 2013
Press Release - TOC Events are pleased to announce a new addition to our global portfolio with the launch of the inaugural Bulk Ports & Technolo ...
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- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Malabar Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Aditya Birla Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- South Luzon Thermal Energy Corporation
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- MS Steel International - UAE
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Kartika Selabumi Mining - Indonesia
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- TeaM Sual Corporation - Philippines
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Latin American Coal - Colombia
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Kaltim Prima Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Ambuja Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petron Corporation, Philippines
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