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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, 03 January 13
DRY BULK DEMAND TO KEEP RISING IN 2013, DRY BULK SHIP PRICES TO KEEP FALLING SAYS ANALYST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In a recent report on the future of the shipping markets, DVB bank said that dry bulk demand is expected to keep on growing in the coming years, mai ...
Wednesday, 02 January 13
NEWCASTLE PORT SHIPPED 23.61 PERCENT MORE COAL W-W
COALspot.com - Newcastle port in Australia has loaded 3,533,183 MT of thermal and coking coal for week ended 0700 hours 31 December 2012, Newc ...
Wednesday, 02 January 13
DRY BULK MARKET TO STAY ELEVATED IN START OF 2013 BUT THE NEW YEAR WILL NOT BE WITHOUT TURBULENCE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In its regular update on the dry bulk market, BIMCO forecasted, that Capesize time-charter rates are expected to stay elevated in the following six ...
Monday, 31 December 12
KOSEP IS LOOKING FOR 280K MT OF 4600 NCV COAL FOR APRIL - JUNE 2013
COALspot.com : South Korean state-owned utility Korea South-East Power Co., Ltd. (KOSEP), has issued an new tender for prompt supply of 280,00 ...
Monday, 31 December 12
VALE CELEBRATES ARRIVAL OF "VALE SOHAR" BULK CARRIER TO SULTANATE WITH MEMBERS OF COMMUNITY
'Vale Sohar', one of the largest bulk carriers in the world, was welcomed to Oman by members of the North Al Batinah community headed by H.E. Shei ...
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- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Banpu Public Company Limited - Thailand
- Bhatia International Limited - India
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- The University of Queensland
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Jaiprakash Power Ventures ltd
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- SMG Consultants - Indonesia
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Samtan Co., Ltd - South Korea
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- VISA Power Limited - India
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Bhushan Steel Limited - India
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
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