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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, 10 June 21
INDONESIA COAL EARNINGS RECOVERY TO SLOW AFTER STRONG 1Q - FITCH RATINGS
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Thursday, 10 June 21
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EIA expects U.S. coal production to total 600 million short tons (MMst) in 2021, which is 61 MMst (11%) more than in 2020.
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Saturday, 05 June 21
KOMIPO INVITED 5600 NAR COAL OFFERS FOR THREE YEARS SUPPLY; 520,000 MT PER YEAR
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- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- Planning Commission, India
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- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
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- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
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- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Iligan Light & Power Inc, Philippines
- Marubeni Corporation - India
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Coalindo Energy - Indonesia
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- CNBM International Corporation - China
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- Tata Chemicals Ltd - India
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
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- Binh Thuan Hamico - Vietnam
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- Africa Commodities Group - South Africa
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- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- The University of Queensland
- VISA Power Limited - India
- Semirara Mining Corp, Philippines
- Altura Mining Limited, Indonesia
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Parliament of New Zealand
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- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Wilmar Investment Holdings
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
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- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
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- Bahari Cakrawala Sebuku - Indonesia
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