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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, 24 August 16
DRY BULK VESSELS FACE CONTINUED DISTRESS - CLEAR ASSET
Dry bulk vessels have faced extreme distress in recent years. With a combination of factors including newer vessels being ordered with up to 5-year ...
Tuesday, 23 August 16
4200 GAR COAL INDEX CLIMB 15.96% YEAR TO DATE - CS COAL INDEX
COALspot.com: Average 4200 GAR coal index of Indonesian origin rose 1.65 % week over week to averaging $31.46 per ton this past week, shows CS (i) ...
Tuesday, 23 August 16
KOMIPO TO IMPORT 250K OF 5,700 KCAL/KG NAR COAL FOR Q4' 16
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for total 250,000 Metric Tons of Bituminous Coal for ...
Monday, 22 August 16
INDONESIA'S CS 5000 GAR THERMAL COAL INDEX, ROSE TO A 57-WEEKS HIGH TO TOP $43.47 A TON
COALspot.com: Indonesia’s CS 5000 GAR thermal coal index, rose to a 57-weeks high to top $US43. 47 a ton in the latest week, extending a 18-w ...
Monday, 22 August 16
THE FREIGHT MARKET WAS STEADY THIS PAST WEEK; CAPE INDEX DECLINE 5.38%
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose and ending in a positive note this past week except ...
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Showing 2311 to 2315 news of total 6871 |
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- Cigading International Bulk Terminal - Indonesia
- Minerals Council of Australia
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Power Finance Corporation Ltd., India
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Coal and Oil Company - UAE
- Planning Commission, India
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- San Jose City I Power Corp, Philippines
- Mintek Dendrill Indonesia
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- VISA Power Limited - India
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Semirara Mining Corp, Philippines
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Trasteel International SA, Italy
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