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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, 22 May 12
NEW ONE-YEAR TIME CHARTERS FOR TWO VESSELS OF EXCEL MARITIME CARRIERS LTD.
Excel Maritime Carriers Ltd. (NYSE: EXM), an owner and operator of dry bulk carriers and an international provider of worldwide seaborne transportat ...
Tuesday, 22 May 12
DRY BULK MARKET STEADY, AWAITING FURTHER RISE IN DEMAND WHICH IS DOUBTFUL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Traditionally, the second and third quarters of the year are the strongest for the dry bulk market, but this year, things seem to be quite subdued, ...
Sunday, 20 May 12
SPOT FREIGHT RATE DIPS FURTHER - VISTAAR
COALspot.com - The BDI was marginally up by 3 points (0.26 pct) closing at 1,141 points.
The cape index was up by 1.17 pct closing at 1,633 point ...
Saturday, 19 May 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS DROP US$ 2.88 PMT W-O-W
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for June deliveries have drops this week by 3.86 percent and& ...
Saturday, 19 May 12
INDONESIAN EXPORT TAX GIVES COAL MINERS A CHEAP RIDE: ANALYSTS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s policy to exclude coal from an export tax that has been applied to 14 other mineral commodities h ...
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- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Trasteel International SA, Italy
- The University of Queensland
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- CNBM International Corporation - China
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Central Java Power - Indonesia
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Heidelberg Cement - Germany
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
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