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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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China recorded a trade surplus of USD 47.3 billion in July 2014. The record high surplus came on the back of very strong export growth while import ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Eastern Energy - Thailand
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- PTC India Limited - India
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Savvy Resources Ltd - HongKong
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- MS Steel International - UAE
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Central Electricity Authority - India
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Global Business Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Energy Development Corp, Philippines
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- PowerSource Philippines DevCo
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
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