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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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Thursday, 14 August 14
INDIA'S PLAN TO START AN INFRASTRUCTURE BOOM AND TO INVEST US$ 1 TRILLION BY 2017 WILL SURELY AFFECT THE DRY BULK TRADE - FEARNLEYS
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INDONESIAN COAL PRICE REFERENCE FALL AGAIN CLOSE TO 57 MONTHS LOWS
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Monday, 11 August 14
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- Price Waterhouse Coopers - Russia
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Planning Commission, India
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- The University of Queensland
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Semirara Mining Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Bhatia International Limited - India
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- Anglo American - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- The Treasury - Australian Government
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Agrawal Coal Company - India
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Australian Coal Association
- Posco Energy - South Korea
- Bangladesh Power Developement Board
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
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