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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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- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Electricity Authority, New Zealand
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- IEA Clean Coal Centre - UK
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Parliament of New Zealand
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Indogreen Group - Indonesia
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- Aditya Birla Group - India
- Sree Jayajothi Cements Limited - India
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Simpson Spence & Young - Indonesia
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Bhatia International Limited - India
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Power Finance Corporation Ltd., India
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
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