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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, 16 January 21
SEABORNE TRADE IN STEAM COAL DECREASED BY 11.6% FROM 937 MILLION TONNES IN 2019 TO 828 MILLION TONNES IN 2020 - COAL IMPORTERS ASSOCIATION, GERMANY
According to preliminary calculations by the German Coal Importers Association (Verein der Kohlenimporteure e. V.), global hard coal production dec ...
Friday, 15 January 21
OVER US$50 BILLION IN GAS POWER PROJECTS AND LNG IMPORT FACILITIES AT RISK OF CANCELLATION IN BANGLADESH, PAKISTAN AND VIETNAM - IEEFA
Pakistan and Bangladesh have already cancelled tenders for LNG imports
Emerging markets such as Vietnam, Pakistan and Bangladesh tha ...
Friday, 15 January 21
VIETNAM'S EXTRAORDINARY ROOFTOP SOLAR SUCCESS DEALS ANOTHER BLOW TO THE REMAINING COAL PIPELINE - IEEFA
9.3 gigawatts peak of solar capacity, equal to 6 coal power plants, installed in less than a year
Vietnam’s solar power indust ...
Friday, 15 January 21
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 14 January 21
KOREA MIDLAND POWER INVITED BIDS FOR AUSTRALIAN COAL FOR THREE YEARS SUPPLY
COALspot.com: Korea Midland Power Co. Ltd, issued an International tender for total 1,560,000 MT of Min.5,700 kcal/kg NCV coal of Australian Origin ...
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- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
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- Power Finance Corporation Ltd., India
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- LBH Netherlands Bv - Netherlands
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- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
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- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- The Treasury - Australian Government
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- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
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- PTC India Limited - India
- Vedanta Resources Plc - India
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Parliament of New Zealand
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- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
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- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Mjunction Services Limited - India
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- ASAPP Information Group - India
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- Merrill Lynch Commodities Europe
- Renaissance Capital - South Africa
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- Pendopo Energi Batubara - Indonesia
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Economic Council, Georgia
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Tata Chemicals Ltd - India
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Straits Asia Resources Limited - Singapore
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- London Commodity Brokers - England
- Central Java Power - Indonesia
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Ambuja Cements Ltd - India
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