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