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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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Thursday, 21 May 20
KOMIPO INVITED BIDS FOR TOTAL 610000 MT OF LCV AND HCV COAL FOR 2H 2020
COALspot.com: South Korea’s Korea Midland Power Co. Ltd. (KOMIPO) has Issued an International Tender for 130,000 mt of 5700 NCV coal an ...
Wednesday, 20 May 20
ADARO ENERGY BOOKED A 5% INCREASE IN COAL PRODUCTION VOLUME Y-O-Y IN 1Q2020
PT. Adaro Energy Tbk, Indonesia’s one of the largest coal miner, booked a 5% increase in coal production volume year-over-year in 1Q2020. The ...
Wednesday, 20 May 20
BRAZIL SOYBEAN EXPORTS HAVE BEEN SURGING THIS YEAR - BANCHERO COSTA
Brazil soybean exports have been surging this year, thanks to a combination of strong demand from China, a bumper crop, and favourable exchange rat ...
Wednesday, 20 May 20
MARKET INSIGHT
Seafarers keep maritime trade going so that the food, raw materials, energy and manufactured goods on which so many depend can continue moving arou ...
Tuesday, 19 May 20
AMENDMENT OF THE INDONESIAN MINING LAW: TYING UP LOOSE ENDS - UMBRA
KNOWLEDGE TO ELEVATE
The finalized draft of Law on the amendment of the Mining Law (Bill) was publicly released on 11 May 2020 and was then ap ...
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- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- McConnell Dowell - Australia
- PowerSource Philippines DevCo
- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Wilmar Investment Holdings
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- PTC India Limited - India
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- Australian Coal Association
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- PetroVietnam Power Coal Import and Supply Company
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Aditya Birla Group - India
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Altura Mining Limited, Indonesia
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Tata Chemicals Ltd - India
- Planning Commission, India
- Indian Energy Exchange, India
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Borneo Indobara - Indonesia
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- ASAPP Information Group - India
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
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