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