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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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Friday, 11 July 14
UNITED STATE'S MONTHLY COAL OUTPUT FALLS 5.53% IN JUNE
COALspot.com – United States the world's second largest coal producer, produced approximately 18.1 million short tons (mmst) of coal in a ...
Thursday, 10 July 14
SGX EXPANDS ACROSS THE BULKS WITH NEW COAL PRODUCTS
COALspot.com: Singapore Exchange (SGX) is expanding its bulk commodity derivatives offering by launching new coking and thermal coal products on 4 ...
Thursday, 10 July 14
HANDY: SMALL INCREASE; PANAMAX: POSITIVE TONE; CAPESIZE: PAPER VALUES REMAIN WEEK
Handy
It is a general increase in activity in both hemispheres whereas rates have just experienced a small increase. In the Feast we see stable a ...
Wednesday, 09 July 14
SHIP INVESTMENTS ARE TRENDING LOWER
Most ship owners are deeming current ship prices on the high side, refraining from making serious commitments in new acquisitions or newbuilding or ...
Wednesday, 09 July 14
INDIAN GOVERNMENT ADVISED POWER UTILITIES TO INCREASE COAL IMPORTS
COALspot.com: The government of India has advised power utilities to increase coal imports to meet fuel shortages and those that have fuel supply p ...
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Showing 3611 to 3615 news of total 6871 |
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- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Bhatia International Limited - India
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- International Coal Ventures Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- Australian Coal Association
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Carbofer General Trading SA - India
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- Savvy Resources Ltd - HongKong
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
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