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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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Sunday, 07 June 20
A SCRUBBER FITTED 61,000 ULTRAMAX WAS FIXED DELIVERY PHILIPPINES TRIP VIA SOUTH AFRICA REDELIVERY VIETNAM AT $9,500 - BALTIC BRIEFING
Capesize
The small flicker of hope at the beginning of this week has kindled a small fire under the Capesize market. At a paltry $3369 from the ...
Saturday, 06 June 20
KOREA SOUTH-EAST POWER CO INVITED COAL BIDS FOR MIN 5600 NCV COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 270,000 Tons (MT) min. 5600 NCV co ...
Friday, 05 June 20
COAL INDIA ESTIMATES PRODUCTION GROWTH BY OVERBURDEN REMOVAL - FINANCIAL EXPRESS
PSU miner Coal India (CIL) has now limited mining only to Overburden Removal (OBR) with falling demand of coal. The mining behemoth is now keeping ...
Friday, 05 June 20
U.S. SANCTIONS COMPLIANCE GUIDANCE RELEASED FOR THE GLOBAL MARITIME, ENERGY AND METALS SECTORS - AKIN GUMP
Key Points
On May 14, 2020, OFAC, the Department of State and the U.S. Coast Guard jointly released guidance for persons involved in the ma ...
Friday, 05 June 20
IN THE FIRST 5 MONTHS OF 2020 AUSTRALIA SHIPPED 6.8 MLN TONNES TO VIETNAM - BANCHERO COSTA
In the first 5 months of 2020, global seaborne coal trade declined by as much as -8% year-on-year, according to vessel tracking data from Ref ...
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- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Planning Commission, India
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Thiess Contractors Indonesia
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Central Java Power - Indonesia
- VISA Power Limited - India
- Meralco Power Generation, Philippines
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Indonesian Coal Mining Association
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- Australian Coal Association
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Bhatia International Limited - India
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- PTC India Limited - India
- Singapore Mercantile Exchange
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- Ministry of Transport, Egypt
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- AsiaOL BioFuels Corp., Philippines
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Iligan Light & Power Inc, Philippines
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