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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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Sunday, 11 July 21
COAL SHOWS ITS STAYING POWER AS ECONOMIES BOUNCE BACK - THE WALL STREET JOURNAL
Coal use is surging in some of the world’s largest economies as electricity demand rebounds from the pandemic, illustrating the challenges to ...
Sunday, 11 July 21
ROBUST CHINA COAL DEMAND AMID AUSTRALIA IMPORT BAN FUELS PRICE RALLY - REUTERS
Seaborne coal has become a quiet winner among energy commodities, lacking the attention of higher-profile crude oil and liquefied natural gas (LNG) ...
Saturday, 10 July 21
OVERESTIMATED LCOES OF COAL-FIRED POWER PLANTS CREATE A FINANCIAL BUBBLE - IEEFA
Massive stranded asset risk detrimentally affects the financial and power distribution
India’s future coal-fired power project pipeline ...
Friday, 09 July 21
EIA FORECASTS COAL’S GENERATION SHARE IN U.S TO RISE FROM 20% IN 2020 TO 24% THIS YEAR BUT TO FALL TO 22% NEXT YEAR
The July Short-Term Energy Outlook (STEO) of EIA remains subject to heightened levels of uncertainty related to the ongoing economic recovery from ...
Friday, 09 July 21
KOREA SOUTH-EAST POWER CO., LTD. INVITES BIDS FOR 1.86 MILLION TONS OF COAL OF 5600 & 4000 NCV COAL FOR THREE YEARS
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 280,000 – 300,000 MT of Min. ...
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- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- Economic Council, Georgia
- PTC India Limited - India
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
- Parliament of New Zealand
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Mercator Lines Limited - India
- Sindya Power Generating Company Private Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- McConnell Dowell - Australia
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
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