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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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Tuesday, 27 November 12
NEWCASTLE PORT HAS SHIPPED 1.79 MILLION TONS OF COAL W/E 26 NOVEMBER
COALspot.com - Newcastle port in Australia has loaded 1,793,841 MT of thermal and coking coal for week ended 0700 hours 26 November 2012, Newc ...
Sunday, 25 November 12
INDONESIA TO INDIA SUPRAMAX FREIGHT RATES ARE EXPECTED TO BE FIRM - VISTAAR
COALspot.com - The freight market was buoyant this week with all sectors up except for the Cape size index. The BDI was up by 5.21 pct closing at 10 ...
Sunday, 25 November 12
INDONESIAN SUB BITUMINOUS COAL SWAP CONTRACTS SLIDE
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for February 2013 delivery lost 0.76percent WoW but gained 0.16 percent DoD on Friday ...
Saturday, 24 November 12
DELTA DUNIA MAKMUR PRODUCES 3.2 MILLION TONS OF COAL IN OCTOBER
COALspot.com - PT Delta Dunia Makmur Tbk., has removed 31.1 million bcm* (-4.0% YoY) of Overburden in October 2012 totaled while coal production was ...
Friday, 23 November 12
CHOOSING THE RIGHT TIME TO INVEST IN NEW VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Shipping is all about timing, a process often rising to the height of artform, as ship owners are having to pick the exact moment of selling most of ...
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- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Cement Manufacturers Association - India
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Star Paper Mills Limited - India
- Kideco Jaya Agung - Indonesia
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- Marubeni Corporation - India
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Eastern Coal Council - USA
- VISA Power Limited - India
- Videocon Industries ltd - India
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