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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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Monday, 17 July 23
APPROVED AMMONIA-FUELED CONTAINERSHIP - BENEFITS AND RISKS: REED SMITH
Following the news in Offshore Energy that Korea Maritime Consultants has secured approval in principle from the American Bureau of Shipping for it ...
Friday, 14 July 23
CLEAN COAL USE KEY TO DEEP CUTS IN EMISSIONS, STABLE ELECTRICITY SUPPLY - CHINA DAILY
China must push for the clean use of coal and step up integration of the dirty fuel with carbon capture, utilization and storage to achieve sustain ...
Thursday, 13 July 23
VIETNAM'S COAL EMISSIONS PRIMED FOR SURGE AFTER IMPORTS JUMP - REUTERS
Vietnam’s thermal power emissions are primed for a steep climb this summer after the country’s imports of thermal coal soared to their ...
Monday, 26 June 23
COAL PRODUCTION AND CONSUMPTION UP IN 2022 - EUROSTAT
In 2022, EU coal production and consumption continued to increase, reaching 349 million tonnes (+5% compared with the previous year) and 454 millio ...
Wednesday, 21 June 23
QATAR STRIKES SECOND BIG LNG SUPPLY DEAL WITH CHINA - REUTERS
Qatar on Tuesday secured its second large gas supply deal with a Chinese state-controlled company in less than a year, putting Asia clearly ahead i ...
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- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- Price Waterhouse Coopers - Russia
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Krishnapatnam Port Company Ltd. - India
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Energy Development Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Renaissance Capital - South Africa
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- GMR Energy Limited - India
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- White Energy Company Limited
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- Pendopo Energi Batubara - Indonesia
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- PetroVietnam Power Coal Import and Supply Company
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