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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, 03 August 16
SHIP TRADING AND ORDERING CLOSE TO A STALEMATE AS SUMMER LULL KICKS IN
With newbuilding activity already at a near standstill since the start of the year, most of 2016’s trading activity in shipping was evident i ...
Tuesday, 02 August 16
INDONESIAN CS COAL INDICES STAY POSITIVE
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 0.71% week over week to averaging $41.12 per ton this past week, shows CS (i) C ...
Monday, 01 August 16
4200 GAR INDONESIAN COAL PRICE MAY TOUCH $ 32/33 A TON LEVELS SOON
COALspot.com: Indonesian coal prices are likely surge further in 2016 as the recent price movement in Indonesian coal markets suggests that the mar ...
Monday, 01 August 16
BALTIC INDEX ENDED NEGATIVE NOTE THIS PAST WEEK ON WEAKER RATES ACROSS ALL LARGE VESSEL SEGMENTS
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities slide slightly as Cape, Panamax and Supramax segments end ...
Friday, 29 July 16
U.S. COAL OUTPUT SLIPS SLIGHTLY WEEK OVER WEEK
COALspot.com – U.S., the world’s second largest coal producers has produced approximately totalled an estimated 15 million short tons ( ...
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- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Edison Trading Spa - Italy
- VISA Power Limited - India
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
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- SMC Global Power, Philippines
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
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- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
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- Independent Power Producers Association of India
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
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- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Commonwealth Bank - Australia
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Central Electricity Authority - India
- Globalindo Alam Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Port Waratah Coal Services - Australia
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Planning Commission, India
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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