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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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Wednesday, 18 April 18
SHIPPING MARKET INSIGHT - STELIOS KOLLINTZAS
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Monday, 16 April 18
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Thursday, 12 April 18
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Container and, to some extent, dry bulk would probably be the shipping segments most affected by the recently announced US and China tariffs, Fitch ...
Thursday, 12 April 18
SUPRAS HAVE FIXED MID $11K FOR AN INDO RV TO S. CHINA DELIVERY PHILIPPINES - FEARNLEYS
Supramax
Slow week with little light for improving rates. ECSA to Far East still around $15k + bb and same to Med ca $14k, says Fearnleys in its ...
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- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- Globalindo Alam Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Sindya Power Generating Company Private Ltd
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- The Treasury - Australian Government
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- Aditya Birla Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
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