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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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Friday, 24 July 20
IPA: THERMAL COAL IMPORTS AT MAJOR PORTS DECLINE 35 PC TO 17.71 MT IN APR TO JUNE - ECONOMIC TIMES
These ports had handled 27.13 MT of thermal coal and 14.95 MT of coking coal in the April-June period of the previous financial year
...
Thursday, 23 July 20
KOREAN GENCOS INVITED BIDS FOR TOTAL 1.36 MILLION TONS OF BITUMINOUS COAL FOR OCTOBER 2020 LOADING
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) on behalf of EWP, KOSPO, KOSEP and KOWEPO has issued an international tender for total 1,360,00 ...
Wednesday, 22 July 20
CIL'S COAL SUPPLY TO POWER SECTOR DROPS OVER 21% TO 93.5 MT IN APR-JUN QUARTER - PTI
The supply of coal by state-owned Coal India Ltd to the power sector fell 21.7 percent to 93.5 million tonnes (MT) in the first quarter of the ongo ...
Monday, 20 July 20
KOREA MIDLAND POWER INVITED BIDS FOR TOTAL 2.520 MILLION MT OF BITUMINOUS COAL FOR THREE YEARS
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO), has issued an international tender for total 840,000 of Bituminous Coal to be used at Bo ...
Monday, 20 July 20
CHINA'S JUNE COAL OUTPUT FALLS 1.2% YEAR-ON-YEAR OVER ILLEGAL MINING CHECKS - REUTERS
China’s coal output dropped 1.2% in June on the year to 330 million tonnes, official data showed, as major coal mining areas cracked down on ...
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- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- Deloitte Consulting - India
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chamber of Mines of South Africa
- Minerals Council of Australia
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- San Jose City I Power Corp, Philippines
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- Economic Council, Georgia
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- Australian Coal Association
- CNBM International Corporation - China
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- The University of Queensland
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- Mercator Lines Limited - India
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- Standard Chartered Bank - UAE
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
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