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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, 28 August 18
COURT CONCLUDES DELIVERY MADE IN ACCORDANCE WITH TERMS OF LOIS - INCE&CO
Glencore Agriculture BV v Navig8 Chemicals Pool Inc (Songa Winds) [2018] EWCA 1901 (Civ)
In this case, the Commercial Court fo ...
Tuesday, 28 August 18
SUPRAMAX: A COAL TRIP VIA INDONESIA PAID $13,500 ON A 56,000DWT TO WC INDIA - BALTIC BRIEFING
Capesize
The Singapore holiday mid-week disrupted trading and unsettled the market, with owners losing some resilience. The market took on a la ...
Tuesday, 28 August 18
SHIPPING MARKET UPDATE - GEORGE LAZARIDIS
As we edge close to the start of the Autumn Season, a period within the year that is usually characterized as the pivot point from the final quarte ...
Friday, 24 August 18
KOREAN RESTRICTIONS ON COAL SULPHUR IMPACTING HUNTER EXPORTS - THE HERALD
WARNINGS that Korean restrictions on sulphur levels in coal could hurt the Hunter industry appear to have been accurate, according to a report in t ...
Thursday, 23 August 18
RUSSIA'S MECHEL PRODUCED 9.69 MMT OF RUN-OF-MINE COAL IN 1H'2018
Mechel PAO, one of the leading Russian mining and metals companies, announces 1H2018 operational results.
Mechel PAO’s Chief E ...
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- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Kobexindo Tractors - Indoneisa
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Energy Development Corp, Philippines
- Ministry of Transport, Egypt
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- The University of Queensland
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- MS Steel International - UAE
- Globalindo Alam Lestari - Indonesia
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Interocean Group of Companies - India
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- Orica Mining Services - Indonesia
- Metalloyd Limited - United Kingdom
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Petron Corporation, Philippines
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Mintek Dendrill Indonesia
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Orica Australia Pty. Ltd.
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- PTC India Limited - India
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
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