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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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Monday, 31 December 12
"DISTRESSED", "ECO" AND "FINANCE" ARE THE THREE WORDS WHICH CHARACTERIZED 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
2012 was yet another year of speculation, anticipation, pessimism and more speculation in the shipping markets. According to the latest weekly repor ...
Saturday, 29 December 12
SHIPBREAKING YARDS IN INDIA DEMOLISH A TOTAL OF 527 VESSELS IN 2012, BREAKING ALL PREVIOUS RECORDS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
India's ship demolition experts of Star Matrix contemplated this week on the issue of why ships in the range of 1,000 and up to 6,500 liquid tons ( ...
Thursday, 27 December 12
A LOOK AT WORLD TRADE PATTERNS DURING 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
While China's leaders are likely to stick with the 2012 economic growth rate of 7.5% when they chart a course for 2013 - its weakest pace since 199 ...
Thursday, 27 December 12
INDONESIA SHIPPED 33.578* MMT COAL IN NOVEMBER
COALspot.com: Indonesia, the world largest multi grade coal exporter has shipped 33.578* million tons of coal in November 2012. thi ...
Wednesday, 26 December 12
UPDATE ON EXPORT BAN ON RAW MINERALS AND ORE - RITA SUSANTO
COALspot.com - In May 2012, the Minister of Energy and Mineral Resources (“MoEMR”) in Regulation No.7 (“Reg-7”, amended by R ...
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- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- The University of Queensland
- Coal and Oil Company - UAE
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Africa Commodities Group - South Africa
- Antam Resourcindo - Indonesia
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- PTC India Limited - India
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Bhatia International Limited - India
- Tamil Nadu electricity Board
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Aditya Birla Group - India
- Australian Coal Association
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Thai Mozambique Logistica
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- SMC Global Power, Philippines
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Bharathi Cement Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Intertek Mineral Services - Indonesia
- Sarangani Energy Corporation, Philippines
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- IEA Clean Coal Centre - UK
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- Parliament of New Zealand
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
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