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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, 06 May 16
U.S. WEEKLY COAL PRODUCTION UP 9 PERCENT W/W; DOWN 35.3 PERCENT Y/Y - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 11.3 million short to ...
Thursday, 05 May 16
DRY BULK MARKET ON REVERSE MODE, AS HOLIDAYS AROUND THE WORLD HURT DEMAND - HELLENIC SHIPPING NEWS
The dry bulk market’s recent rally has been put on a temporary hold, as various holidays around the world have put a stop in it. In its lates ...
Wednesday, 04 May 16
COAL IMPORTS: A VOLATILE MATTER OR STILL POWERING DOWN? - CLARKSONS
Chinese coal imports decreased significantly in 2014-15, and so far in 2016 the pace of decline appears to have slowed, with imports even recording ...
Wednesday, 04 May 16
IS THE DRY BULK MARKET OUT OF THE WOODS YET, OR NOT? - HELLENIC SHIPPING NEWS
Things are beginning to brighten up in the beleaguered dry bulk market, which is riding on a multi-week rally to find itself around the “psyc ...
Wednesday, 04 May 16
POWER - WEEK: REAL EXAMPLES AND CASE STUDIES
POWER WEEK
7 - 11 November 2016, PARKROYAL on Beach Road Hotel, Singapore
www.power-week.com
Overview
Designed for the global e ...
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- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Indika Energy - Indonesia
- The University of Queensland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Central Electricity Authority - India
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Independent Power Producers Association of India
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Goldman Sachs - Singapore
- Karaikal Port Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Toyota Tsusho Corporation, Japan
- Baramulti Group, Indonesia
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- Commonwealth Bank - Australia
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- The Treasury - Australian Government
- Planning Commission, India
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Ministry of Transport, Egypt
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Ambuja Cements Ltd - India
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coal and Oil Company - UAE
- Directorate Of Revenue Intelligence - India
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- Bukit Baiduri Energy - Indonesia
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
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