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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, 26 April 12
PANAMAXES AGAIN EARN MORE THAN CAPESIZES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The latest surge of demand for Panamaxes has led the dry bulk market to new higher ground on Monday, with the Baltic Dry Index (BDI) reaching 1,090 ...
Wednesday, 25 April 12
CHINA IMPORTS 9.76 MMT AND INDIA IMPORTS 7.03 MMT OF INDONESIAN COAL LAST MONTH
COALspot.com: Indonesia, the world largest coal exporter, shipped 30.64* million tons of coal in March 2012, compared to 27.12* million tons i ...
Monday, 23 April 12
ALTURA ENTERS INTO AGREEMENT TO ACQUIRE 2 COAL PROJECTS IN SOUTH KALIMANTAN
COALspot.com - Altura Mining Limited (ASX: AJM) has announced that it has entered into an agreement to acquire a further two (2) Mining Permits (IUP ...
Sunday, 22 April 12
THE FREIGHT MARKET EXPECTED TO REMAIN FIRM NEXT WEEK - VISTAAR
COALspot.com - The BDI has broken the psychological barrier of 1000 points and closed at 1067 points.
The cape index was slightly down by 2.48 pc ...
Saturday, 21 April 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS DROP 2.61 PERCENT THIS WEEK
COALspot.com - Indonesian sub-bituminous coal swaps fell for a fifth day, according to DSP of SGX AsiaClear OTC Coal Swaps.
CFR South China Coal ...
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- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- Kalimantan Lumbung Energi - Indonesia
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- The University of Queensland
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Finance - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- McConnell Dowell - Australia
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
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