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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, 10 February 16
OWNERS APPEAR WILLING TO DISPOSE OF TONNAGE THE SOONEST IT HITS THE 10 YEAR MARK - TIMOS PAPADIMITRIOU
COALspot.com: The last two months of 2015 made a case for traditional shipowners to invest in the dry bulk sector, doing so though based purely on ...
Monday, 08 February 16
DRY-BULK SHIPPING DIVING DEEP
COALspot.com: The freight markets continued to fall this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of glo ...
Monday, 08 February 16
DRY BULK: SHIPBROKER SEES BDI MARKET REACHING LOW POINT OF 236 POINTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The endless pit that is the dry bulk market over the past two months, has been the issue of debate among ship owners, shipbroker and analysts alike ...
Friday, 05 February 16
COAL INDIA EYES COAL MINES IN SOUTH AFRICA - PTI
“Coal India Ltd has plans of acquiring coal mines in South Africa,” an official said. It is looking at acquiring mines in partnership w ...
Friday, 05 February 16
U.S. WEEKLY COAL OUTPUT ROSE 4.2% TO 13.6 MMST
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.6 million shor ...
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- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- VISA Power Limited - India
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Indonesian Coal Mining Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Orica Mining Services - Indonesia
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Energy Development Corp, Philippines
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Sarangani Energy Corporation, Philippines
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
- Australian Coal Association
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- Timah Investasi Mineral - Indoneisa
- PTC India Limited - India
- Interocean Group of Companies - India
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Formosa Plastics Group - Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- Ceylon Electricity Board - Sri Lanka
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Wood Mackenzie - Singapore
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