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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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Tuesday, 22 May 12
NEW ONE-YEAR TIME CHARTERS FOR TWO VESSELS OF EXCEL MARITIME CARRIERS LTD.
Excel Maritime Carriers Ltd. (NYSE: EXM), an owner and operator of dry bulk carriers and an international provider of worldwide seaborne transportat ...
Tuesday, 22 May 12
DRY BULK MARKET STEADY, AWAITING FURTHER RISE IN DEMAND WHICH IS DOUBTFUL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Traditionally, the second and third quarters of the year are the strongest for the dry bulk market, but this year, things seem to be quite subdued, ...
Sunday, 20 May 12
SPOT FREIGHT RATE DIPS FURTHER - VISTAAR
COALspot.com - The BDI was marginally up by 3 points (0.26 pct) closing at 1,141 points.
The cape index was up by 1.17 pct closing at 1,633 point ...
Saturday, 19 May 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS DROP US$ 2.88 PMT W-O-W
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for June deliveries have drops this week by 3.86 percent and& ...
Saturday, 19 May 12
INDONESIAN EXPORT TAX GIVES COAL MINERS A CHEAP RIDE: ANALYSTS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s policy to exclude coal from an export tax that has been applied to 14 other mineral commodities h ...
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- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Trasteel International SA, Italy
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Marubeni Corporation - India
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Riau Bara Harum - Indonesia
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- The Treasury - Australian Government
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Australian Coal Association
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Planning Commission, India
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Deloitte Consulting - India
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
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