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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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Friday, 08 September 17
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A recent consultancy survey has suggested that some 85% of refiners have not made plans for how to deal with the expected dramatic fall in g ...
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Wednesday, 06 September 17
LAYTIME - CHARTERERS' RIGHTS & PORT COSTS - NORTH P&I CLUB
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In a recent London Arbitration decision (18/17) the Tribunal had to consider whether the owners were entitled to recover ...
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SHIPPING MARKET INSIGHT - STELIOS KOLLINTZAS
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Showing 1951 to 1955 news of total 6871 |
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- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- Georgia Ports Authority, United States
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Makarim & Taira - Indonesia
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Sakthi Sugars Limited - India
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- VISA Power Limited - India
- Interocean Group of Companies - India
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- New Zealand Coal & Carbon
- Thai Mozambique Logistica
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parliament of New Zealand
- Sical Logistics Limited - India
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- Lanco Infratech Ltd - India
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Intertek Mineral Services - Indonesia
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- The University of Queensland
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Pipit Mutiara Jaya. PT, Indonesia
- Bayan Resources Tbk. - Indonesia
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
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