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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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Tuesday, 18 August 20
BLACKBALLED: WILL COAL BOUNCE BACK FROM SLUMP OR IS IT TERMINAL? - SYDNEY MORNING HERALD
Even by the standards of this miserable year, 2020 has been a shocker for the global coal industry.
As the lockdown kicked in demand ...
Friday, 14 August 20
EIA: COAL PLANTS UNECONOMICAL IN MOST REGIONS - IEEFA
U.S. coal power generation plunged by 30 percent in the first half of 2020 off an already-depressed base, shoved out by natural gas and renewables ...
Thursday, 13 August 20
INDIA SHOULD RECORD A SLIGHT DECREASE IN THERMAL COAL IMPORTS, REACHING A VOLUME OF 167 MILLION TONS BY THE END OF 2020 - ASSOCARBONI
Regarding 2020 thermal coal imports forecasts, Vietnam’s coal imports showed a very strong growth in the first half of 2020 and it is believe ...
Thursday, 13 August 20
INDONESIA REMAINS THE LARGEST EXPORTER OF COAL IN THE WORLD - ASSOCARBONI
According to the last Assocarboni data for 2019, Indonesia remains the largest exporter in the world. Thermal coal exports have in fact reached 456 ...
Wednesday, 12 August 20
VIETNAM WAS THE PROTAGONIST OF A SIGNIFICANT INCREASE IN COAL IMPORTS IN 2019 - ASSOCARBONI
The latest Assocarboni data for 2019 also provide a detailed picture on the trend of the global coal import.
According to Assocarbon ...
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- Miang Besar Coal Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Minerals Council of Australia
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Marubeni Corporation - India
- Meenaskhi Energy Private Limited - India
- Merrill Lynch Commodities Europe
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- Power Finance Corporation Ltd., India
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Bharathi Cement Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Thai Mozambique Logistica
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- Grasim Industreis Ltd - India
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Romanian Commodities Exchange
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Economic Council, Georgia
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Gujarat Sidhee Cement - India
- CNBM International Corporation - China
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
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