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