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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, 19 April 13
FIRST QUARTER OF 2013 PROVEN A POSITIVE SURPRISE FOR DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite ominous predictions regarding the negative performance of the dry bulk market during the – traditionally weak anyway – first qua ...
Thursday, 18 April 13
HANDY: STABLE ; PANAMAX: BUSY WEEK - FEARNRESEARCH
Handy
The Atlantic markets remain stable in this week. The USG-Feast was at USD 19k and Black Sea-Feast was at USD 12k. The Pacific market is bit f ...
Thursday, 18 April 13
FEATURE: PREDICTING THE FUTURE - AND THE PAST - BIMCO
It’s not predicting the future that is problematical, it’s the realisation that you have to relive the past again and again when you fai ...
Wednesday, 17 April 13
INDONESIA SHIPPED 80 MILLION TONS OF COAL IN FIRST QUARTER - COAL DIRECTOR
COALspot.com - Indonesia has exported around 80 million tons of coal including power plant coal in first three months of this year.
Speaking on t ...
Tuesday, 16 April 13
AUSTRALIAN NEWCASTLE PORT'S COAL EXPORTS JUMPED 20.87 PER CENT ON WEEK TO 3.07 MMT
COALspot.com - Newcastle port in Australia has loaded 3,077,431 tons of thermal and coking coal for week ended 0700 hours 15 April 2013, Newca ...
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- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
- Economic Council, Georgia
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- VISA Power Limited - India
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- PowerSource Philippines DevCo
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Price Waterhouse Coopers - Russia
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Australian Coal Association
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Mercator Lines Limited - India
- Planning Commission, India
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Central Electricity Authority - India
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Electricity Authority, New Zealand
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
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