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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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Friday, 06 September 24
REBOUND IN OIL DEMAND COULD LIFT MARKET IN LATTER HALF OF 2024 - BIMCO
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Friday, 06 September 24
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The recent surge in natural gas and coal prices has been so swift that the main benchmarks were roughly three times higher in 2022Q2 compared to a ...
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- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- Planning Commission, India
- Riau Bara Harum - Indonesia
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- Binh Thuan Hamico - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- The University of Queensland
- Uttam Galva Steels Limited - India
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Petron Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vizag Seaport Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- SMG Consultants - Indonesia
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- GAC Shipping (India) Pvt Ltd
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Africa Commodities Group - South Africa
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- Australian Coal Association
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Borneo Indobara - Indonesia
- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- Baramulti Group, Indonesia
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- Port Waratah Coal Services - Australia
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Medco Energi Mining Internasional
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- Bharathi Cement Corporation - India
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