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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, 27 August 20
BANGLADESH POWER MINISTRY SEEKING AUTHORITY TO CANCEL 13,000 MW OF PROPOSED COAL-FIRED CAPACITY - BUSINESS STANDARD
In a bid to move away from dirty energy, the Ministry of Power, Energy and Mineral Resources is seeking the prime minister’s approval to conv ...
Wednesday, 26 August 20
ASIAN COAL PRICES LIKELY TO REMAIN DEPRESSED SAY TRADERS, ANALYSTS - REUTERS
Asian coal prices, which have fallen around 25% this year as power demand slumped due to the coronavirus outbreak, are unlikely to move higher befo ...
Wednesday, 26 August 20
WORLD COAL EXPORTS: INDONESIAN THERMAL COAL EXPORTS HAVE COME UNDER PRESSURE AS THERMAL COAL PRICES WEAKEN - REPORT
Indonesia’s exports to decline sharply from record highs
Indonesia is the world’s largest thermal coal exporter, sellin ...
Wednesday, 26 August 20
JAPAN'S COAL IMPORTS ARE BEING AFFECTED BY COMPETING INFLUENCES - REPORT
Japan is the world’s third largest thermal coal importer, importing an estimated 135 million tonnes of thermal coal in 2019. The country&rsqu ...
Wednesday, 26 August 20
PENDING SOUTH KOREA LEGISLATION COULD FORCE HALT TO COUNTRY’S COAL PLANT EXPORT DEALS - KOREA ECONOMIC DAILY
South Korea’s parliament looks set to pass new legislation to ban financing on foreign coal power projects, putting all overseas coal-fired p ...
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- Minerals Council of Australia
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Indogreen Group - Indonesia
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Edison Trading Spa - Italy
- Bangladesh Power Developement Board
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- The University of Queensland
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Iligan Light & Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- MS Steel International - UAE
- Neyveli Lignite Corporation Ltd, - India
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- The Treasury - Australian Government
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
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