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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, 02 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.86 PCT - XINHUA
China Taiyuan coal transaction price index stood at 123.95 points Monday, down 0.86 percent week on week.
The index, released by Chi ...
Monday, 01 June 20
SUPRAMAX: IN SOUTH EAST ASIA RATES TRADED SIDEWAYS - BALTIC BRIEFING
Capesize
A sober end to the week, with the market seemingly ready for the weekend. After a steady week of rate declines a small flurry of Atlan ...
Friday, 29 May 20
COVID-19: COAL SUPPLY BY CIL TO POWER SECTOR DIPS 22% TO 32 MT IN APRIL DUE TO DEMAND SLUMP - PTI
Over 95% of CIL’s production comes from its 171 open cast mines.
The supply of coal to the power sector by state-owned Coal In ...
Friday, 29 May 20
AUSTRALIA'S NEW HOPE WARNS OF HIT FROM COAL PRICE SLUMP - REUTERS
Australia’s New Hope Corp Ltd said on Thursday that a sudden drop in thermal coal prices and lower output from its Queensland operations woul ...
Friday, 29 May 20
GOVT MAY LAUNCH COAL BLOCKS AUCTION PROCESS UNDER COMMERCIAL MINING ON JUN 11 - PTI
The Centre is likely to launch the process of coal blocks auction under commercial mining on June 11 and around 50 mines are expected to go under t ...
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- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- PTC India Limited - India
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- Globalindo Alam Lestari - Indonesia
- Anglo American - United Kingdom
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Pendopo Energi Batubara - Indonesia
- Carbofer General Trading SA - India
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- MS Steel International - UAE
- Cement Manufacturers Association - India
- Chettinad Cement Corporation Ltd - India
- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- Makarim & Taira - Indonesia
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- San Jose City I Power Corp, Philippines
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- The University of Queensland
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- ICICI Bank Limited - India
- Planning Commission, India
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Port Waratah Coal Services - Australia
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- PowerSource Philippines DevCo
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- CNBM International Corporation - China
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Gujarat Mineral Development Corp Ltd - India
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