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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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Wednesday, 21 October 20
INDIA: THE COMMERCIALISATION OF COAL BLOCKS WILL BENEFIT THE ECONOMY - HINDU BUSINESS LINE
As the government of India receives 76 bids for 23 coal mines against the 38 up on auction, what does this commercialisation of coal block allocati ...
Wednesday, 21 October 20
MARKET INSIGHT - INTERMODAL
The second wave of COVID-19 is now a reality; offices are closing again, and stricter rules and regulations are being implemented in public spaces. ...
Tuesday, 20 October 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.82 PCT - XINHUA
China Taiyuan coal transaction price index stood at 127.49 points Monday, up 0.82 percent week on week.
The index, released by China ...
Tuesday, 20 October 20
BIMCO 'SHIPLEASE' TERM SHEET - WATSON FARLEY & WILLIAMS
KNOWLEDGE TO ELEVATE
The ever-growing importance of sale and leaseback transactions as an alternative to financing ships by way of loan, makes ...
Friday, 16 October 20
KOMIPO ON BEHALF OF K GENCO'S INVITED BIDS FOR TOTAL 715,000 MT MIN. 5,700 NAR COAL FOR DECEMBER
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) on behalf of EWP, KOSPO, KOSEP and KOWEPO has issued an international tender for total 715,000& ...
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- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Central Java Power - Indonesia
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Interocean Group of Companies - India
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Bhushan Steel Limited - India
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Energy Development Corp, Philippines
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Coal Association
- Minerals Council of Australia
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
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