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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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Saturday, 17 July 21
COAL PRICES TRADE AT DECADE HIGH OF $140 PER TONNE, HERE ARE SOME FACTORS AT PLAY: CNBC-TV18
Coal prices are trading at $140 per tonne. In the last one week, coal has seen more than 8 percent gains; the last one month has seen 24 percent ju ...
Thursday, 15 July 21
U.S. FOSSIL FUEL CONSUMPTION FELL BY 9% IN 2020, THE LOWEST LEVEL IN NEARLY 30 YEARS - EIA
U.S. fossil fuel consumption fell by 9% in 2020, the lowest level in nearly 30 years
In 2020, total consumption of fossil fuels in t ...
Thursday, 15 July 21
IN 2020, U.S. COAL PRODUCTION FELL TO ITS LOWEST LEVEL SINCE 1965 - EIA
U.S. coal production totaled 535 million short tons (MMst) in 2020, a 24% decrease from the 706 MMst mined in 2019 and the lowest level of coal pro ...
Wednesday, 14 July 21
MARKET INSIGHT - INTERMODAL
In its latest Global Economic Prospects report, the world bank recorded the strongest post-recession global growth in 80 years, but emerging and de ...
Tuesday, 13 July 21
JAPAN STILL SEEKING TO EXPLOIT COAL POWER LOOPHOLES - IEEFA
JBIC wants to continue burdening developing nations with its expensive coal-fired power technology
Japan is continuing to push its expensive c ...
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- White Energy Company Limited
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Intertek Mineral Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Renaissance Capital - South Africa
- Krishnapatnam Port Company Ltd. - India
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Indogreen Group - Indonesia
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- Australian Coal Association
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Deloitte Consulting - India
- Bukit Makmur.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- Economic Council, Georgia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Mercator Lines Limited - India
- The University of Queensland
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Cement Manufacturers Association - India
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Thai Mozambique Logistica
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- PTC India Limited - India
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Indian Oil Corporation Limited
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- MS Steel International - UAE
- Indonesian Coal Mining Association
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