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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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- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- Attock Cement Pakistan Limited
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- San Jose City I Power Corp, Philippines
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Planning Commission, India
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Meralco Power Generation, Philippines
- Kaltim Prima Coal - Indonesia
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- McConnell Dowell - Australia
- PTC India Limited - India
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Karbindo Abesyapradhi - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- White Energy Company Limited
- Wilmar Investment Holdings
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Gujarat Sidhee Cement - India
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
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