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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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Thursday, 01 July 21
WHY INDIA’S SOLAR POWER TARIFFS ARE CLIMBING AFTER HITTING RECORD LOWS LAST YEAR - IEEFA
What’s behind the recent increase?
Solar tariffs are deflationary. Prices have fallen by 75% in seven years in India, and in 2 ...
Thursday, 01 July 21
END TO COAL POWER BROUGHT FORWARD TO OCTOBER 2024
Press Release: The deadline to phase out coal from Great Britain's energy system has been brought forward by a whole year, highlighting the UK& ...
Thursday, 01 July 21
WHY BUILD 600 NEW UNPROFITABLE COAL PLANTS? - DEUTSCHE WELLE
Governments in Asia are planning 600 new coal plants that could lose investors $150 billion and derail efforts to limit temperature rise in line wi ...
Thursday, 01 July 21
FIVE ASIAN COUNTRIES ACCOUNT FOR 80% OF NEW COAL POWER INVESTMENT - THE GUARDIAN
Five Asian countries are jeopardising global climate ambitions by investing in 80% of the world’s planned new coal plants, according to a rep ...
Wednesday, 30 June 21
DELTA DUNIA MAKMUR RECORDED AN IMPROVED REVENUE IN Q1 2021; REVENUE INCREASED BY 49% QOQ TO US$160 MILLION ON THE BACK OF COAL PRICE RECOVERY
PT Delta Dunia Makmur Tbk. (“DOID”) released its consolidated financial and operating results that include its primary and wholly-owned ...
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- Indian Energy Exchange, India
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- White Energy Company Limited
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- The Treasury - Australian Government
- CNBM International Corporation - China
- PTC India Limited - India
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Minerals Council of Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Attock Cement Pakistan Limited
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- MS Steel International - UAE
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- Iligan Light & Power Inc, Philippines
- Aditya Birla Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
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