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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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- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- Agrawal Coal Company - India
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Ceylon Electricity Board - Sri Lanka
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Leighton Contractors Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Planning Commission, India
- PTC India Limited - India
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Petron Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- White Energy Company Limited
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Latin American Coal - Colombia
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- PowerSource Philippines DevCo
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- The University of Queensland
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
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