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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, 28 February 13
INDIA HAS INCREASED CUSTOMS DUTY AND COUNTERVAILING DUTY FOR POWER PLANT COAL
COALspot.com : The government of India raised basic customs duty and countervailing duty on steam coal. In the meantime government has reduced& ...
Thursday, 28 February 13
SHIP OWNERS EXPECTED TO FACE A CHALLENGING YEAR, DESPITE THE FALL OF NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Tonnage oversupply and a lagging growth in world trade demand are expected to keep shipping in the "red", despite a series of measures ado ...
Thursday, 28 February 13
PANAMAX : MARKET HAS SEEN A GOOD UPTURN OVER THE LAST WEEK - FEARNLEYS
Handy
The Atlantic saw more cargoes than last week and rates ticking upwards. The USG-Feast was at USD 19k and Black Sea-Feast was at USD 11k. The ...
Wednesday, 27 February 13
NEWCASTLE PORT IN AUSTRALIA SHIPPED 0.358 MILLION MT MORE COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 2,178,869 MT of thermal and coking coal for week ended 0700 hours 25 February 2013, Newc ...
Wednesday, 27 February 13
NEWLEAD HOLDINGS LTD. ANNOUNCES COAL SUPPLY AND DELIVERY CONTRACT
NewLead Holdings Ltd. yesterday announced that the Company has signed an agreement to supply and deliver 1.48 million metric tons of steam coal to a ...
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- Metalloyd Limited - United Kingdom
- Makarim & Taira - Indonesia
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Price Waterhouse Coopers - Russia
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- Planning Commission, India
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- MS Steel International - UAE
- Mercator Lines Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Indian Energy Exchange, India
- ASAPP Information Group - India
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- Gujarat Sidhee Cement - India
- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Georgia Ports Authority, United States
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
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