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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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Monday, 28 September 20
NEW LNG PROJECTS - ALL DRESSED UP AND NO PLACE TO GO - WOOD MACKENZIE
It was meant to be another boom year. After a record 70 mmtpa of new LNG capacity was sanctioned in 2019, at least as much capacity was lined up fo ...
Thursday, 24 September 20
SUPRAMAX: INDO TO INDIA FIXING AROUND US$13,000 - FEARNLEYS
Cape
Over the last week the iron ore segment from Brazil to China has picked up, and we see freight rates up USD 2 (12%) week on week Fearnleys ...
Thursday, 24 September 20
KOREA MIDLAND POWER TO BUY 1.92 MILLION TONS OF 4,300-4,700 NCV COAL FOR THREE YEARS
COALspot.com: Korea Midland Power Co. Ltd, has issued an International tender for 640,000 MT 4,300-4,700 kcal/kg NCV coal per year.
...
Wednesday, 23 September 20
VIETNAM'S NEW POWER DEVELOPMENT PLAN MUST OPTIMIZE RENEWABLES AND AVOID FOSSIL FUEL LOCK-IN: IEEFA
EVN’s financial constraints leaves the utility with little room for error
Implementing Vietnam’s soon-to-be-launched next Power De ...
Wednesday, 23 September 20
MARKET INSIGHT - INTERMODAL
Undoubtedly, this year (ongoing) will never be forgotten because in a matter of months it has managed to severely affect and shape our day to day p ...
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- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Banpu Public Company Limited - Thailand
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- ASAPP Information Group - India
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- The Treasury - Australian Government
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
- CNBM International Corporation - China
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Bukit Baiduri Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- SN Aboitiz Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
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