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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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Wednesday, 27 May 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.94 PCT - XINHUA
China Taiyuan coal transaction price index stood at 125.03 points Monday, up 0.94 percent week on week.
The index, released by China ...
Monday, 25 May 20
NON-OPEC OIL SUPPLY DEVELOPMENT - OPEC
Non-OPEC oil supply continued to increase by 2.0 mb/d in 2019, driven by US shale production, which rose by 1.7 mb/d, amounting to 84% of total non ...
Sunday, 24 May 20
A 63,000 FIXED DELIVERY VIETNAM TRIP VIA INDONESIA REDELIVERY KOSICHANG AT $8,500 - BALTIC BRIEFING
Capesize
After a week of bounce momentum the market appears to have stalled out once again. The Capesize 5TC has more than doubled since last F ...
Saturday, 23 May 20
COLOMBIA COAL OUTPUT DOWN 7.2% IN Q1 ON LOW PRICES, CORONAVIRUS LOCKDOWN - REUTERS
Coal production in Colombia, the world’s fifth-largest coal exporter, fell 7.2% in the first quarter because of low prices and coronavirus qu ...
Saturday, 23 May 20
EWP INVITES BIDS FOR 840,000 METRIC TONS OF MIN 5700 NAR COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd (EWP) has Issued an International Tender for total Max 840,000 Metric Tons of min 5 ...
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- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- PTC India Limited - India
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- Sindya Power Generating Company Private Ltd
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- Directorate Of Revenue Intelligence - India
- Straits Asia Resources Limited - Singapore
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- White Energy Company Limited
- London Commodity Brokers - England
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- Malabar Cements Ltd - India
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- Meralco Power Generation, Philippines
- Rio Tinto Coal - Australia
- MS Steel International - UAE
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- Indian Energy Exchange, India
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- Kepco SPC Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
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